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I am defining what falls within that overall budget line, so that we can be clear on where there has been any movement.

The common market organisation line had £9 million against it. That fund was unspent apart from those specific examples that I have talked about. It was felt that, rather than having a budget line against funding that had not been utilised, it was better to reallocate that resource to other areas where the funding could be spent. That is why it looks as though there has been a reduction in the pillar 1 other payments line.

As I said in a previous response, part of the issue in relation to the funding that we get from the UK Government is that it does not come through as a mix of resource and capital, as it used to. Therefore, we have had a fall in capital allocation over that time.

Together with all my colleagues, of course, my job in Cabinet and within the Scottish Government is to represent the needs of the farmers, crofters and land managers of rural Scotland and to ensure that we get the best possible support and prioritise it as best we can. I believe that, with the package that we have had, the capital settlement has been difficult, and difficult decisions have been made not only in this portfolio but in other areas.

You have highlighted some of the portfolios in Government where there has been an increase, but that is not the case right across Government, and there have been very significant cuts to capital budgets in other areas. In my portfolio in particular, the situation has been very difficult; for example, we have seen quite a significant shortfall in the capital required to deliver on the woodland grant schemes. It is a very disappointing settlement as a whole, but it is my job to do what I can with the funding allocations that we have and to ultimately fight that corner.

We have made really difficult decisions, but I believe that, with this budget and the fact that we have been able to secure that resource-to-capital switch, which has enabled us to do that bit more with capital funding in what were previously unfunded priorities in the portfolio, we are delivering as best we can within the settlement that we have.

It is really difficult going forward, as this is the last year in which we will have any clarity on a settlement and what that will look like. In other words, we do not know what the settlement will look like from 2025-26 onwards. We have tried to engage in those discussions with the UK Government, but that has proven very difficult. We have raised the issue on numerous occasions with the various secretaries of state and the Department for Environment, Food and Rural Affairs on the basis that there had been a commitment to discuss the intra-UK allocations of funding support. As yet, however, the offer to have those discussions has not been taken up.

I have been in touch with the new secretary of state, Steve Barclay, on a number of occasions, but we have yet to receive a response to the correspondence that we issued and in which we tried, essentially, to reset the relationship so that we can have a positive discussion about this. That discussion has still to take place.

Do you mean for the—

Our forecast spend for the programme has reduced. Initially, £20 million was allocated for the programme and we have allocated £12 million for that for the coming year as well. The funding had not been fully utilised during the past year. I do not know whether Karen Morley knows the exact figure.

Absolutely—we will make it as easy as possible. Again, that is in everybody’s best interests. We do not want it to be a bureaucratic exercise and, for the types of activities that happen through AECS, we want to make any future support as easy as possible for farmers to access. Again, it is in all our best interests to do that.

The committee is currently scrutinising the Agriculture and Rural Communities (Scotland) Bill and, of course, we will be in close communication with the committee on that. There will be a scrutiny process for the secondary legislation that will contain the detail of what any future scheme would look like. AECS may not exist in the same form as it does now, but certainly we want to see the activities that are undertaken as part of that scheme to be more fully embedded within a future framework of support.

We have very ambitious targets, but, as I outlined, our available capital budget for new planting is not sufficient to enable us to meet the target that we set for the coming year. We had hoped to meet our target in the climate change plan of 18,000 hectares of new planting this year, but our current capital budget will not enable us to do that.

The reduction in the marine directorate’s budget is, in part, due to the fact that we are not proceeding with the proposal for HPMAs. We have best utilised that funding in taking forward our priorities for marine protection as a whole. My colleague Màiri McAllan led on the HPMA policy and leads on the marine environment.

Our priority remains to deliver the fisheries management measures for the marine protected area network and the priority marine features. That, in and of itself, is no small exercise. We are looking to implement measures at about 160 different sites, so there will need to be extensive stakeholder consultation as part of that process. Our funding for the marine environment is now being prioritised on ensuring that we deliver on those measures and the previous commitments that we have made.

I do not know whether David Signorini wants to add to that.

Thanks very much, convener and committee members, for inviting me to address the committee today.

When I attended the pre-budget session in September, I set out the priorities of my portfolio. I am pleased to come back to outline how the 2024-25 Scottish budget, which the Deputy First Minister presented to Parliament in December, will help to deliver on those priorities within the wider context of the Government’s priorities.

The budget has been set in turbulent circumstances. At the global level, the impacts of inflation, the war in Ukraine and the after-effects of the Covid pandemic continue to create instability. In the United Kingdom, the combined effects of Brexit and disastrous Westminster policies mean that we are uniquely vulnerable to those international shocks. Those Brexit impacts continue to harm Scotland’s rural and island businesses and communities and create new challenges every year for the rural affairs, land reform and islands portfolio to respond to.

Against that background, the decisions that we have taken in this budget are driven by our values and prioritise our three missions. We have chosen a progressive path: to invest in our people, our economy and our public services. Where we can, we have taken action to prioritise support to the most vulnerable in our communities, to attract investment and support a growing, sustainable economy, and to address the nature and climate emergencies.

My priorities are clear. The budgets allocated to my portfolio will continue to make a vital difference to our rural, coastal and islands economy. As I did in the previous financial year, I will prioritise my portfolio’s direct cash injection of over £600 million into the economy for rural, agriculture, marine and island communities.

The Scottish Government is now providing the most generous package of direct support for farmers and crofters anywhere in the United Kingdom. We are also committed to getting money to people and businesses as early as we can every year, to help them to meet on-going inflationary and cost of living pressures. In 2023, the first tranche of direct payments was made in September—earlier than in the previous year—and exceeded forecasts by paying nearly £300 million in basic payments in the first three weeks. We will continue our critical work with the agricultural sector to co-develop and deliver on the agricultural vision, investing to help Scotland to become that global leader in sustainable and regenerative agriculture. We have also committed to deliver agri-environment investment as part of an overall budget of £30 million to support biodiversity.

My portfolio has expanded to include responsibility for peatland and forestry, and we are maintaining our record world-leading investment in peatland. Investment in new woodland creation planting will continue to contribute to our climate change targets and net zero ambitions.

By maintaining the £14 million for the marine fund Scotland, we acknowledge the vital role that our seas play in supporting the economy in coastal communities through fishing and aquaculture, as well as supporting activity to improve and restore the marine environment.

Our commitment to supporting the ambitions for our islands remains strong, with an investment of £6.7 million, which is an increase on the amount in the resource and capital spending review that was published in May 2022, with £4.3 million now allocated in capital.

Members of the committee have rightly taken a keen interest in the ring-fenced money due to return to the portfolio. I welcome the return of the first tranche of £15 million of that funding in the 2024-25 budget. In the draft budget, that funding is allocated as resource funding, but, across the portfolio, the greatest need is capital priorities. I am glad to have received the Deputy First Minister’s agreement in recent days that the portfolio will instead receive that £15 million as capital funding. It will fund vital unfunded capital priorities within the portfolio, which will provide important support to our rural communities, including the agri-environment climate scheme, the agricultural transformation fund, and crofting grants.

The Government will do what we can with all that we have to support our priorities in rural industries and sectors, through this and other portfolios. The biggest challenge that we face is the on-going failure of the UK Government to at least match fund pre-Brexit levels of funding from the European Union, or to provide a multi-annual funding framework that would allow us to take a longer-term view to some investments. Of course, we have no sense of what the funding future holds from the current—or any future—Westminster Government.

I know that you will want to scrutinise carefully our budget plans, but I would ask again that the committee might resolve to work with Government to support our efforts to secure the future rural funding certainty that Scotland needs and very much deserves. Thank you.

Thank you, convener, for inviting me to talk about the regulations.

The purpose of the instrument is to amend legislation relating to the marketing and production of wine and wine products. First, it will introduce rules that will regulate how products that are marketed as “ice wine” must be produced, with the rules including a definition of ice wine. Secondly, it will update the lists of approved oenological practices that can be used to produce and conserve wine and wine products that are marketed in Scotland.

The relevant existing legislation happens to be European Union retained law, which, from 1 January, will be known as assimilated law. The ice wine provision in the instrument is required because the United Kingdom is acceding to the comprehensive and progressive agreement for trans-Pacific partnership, and the provision is required for compliance with the terms of the CPTPP. Although ice wine is not produced in the UK, it is imported, and a definition of it is required to ensure that consumers can identify products that are made according to specified criteria that apply to its production.

The provision in question amends regulation EU 2019/33 to provide that products may only be marketed in Scotland as “ice wine” or similar terms if they have been produced

“exclusively from grapes naturally frozen on the vine.”

The same provision is being made across Great Britain.

Also included in the instrument are changes to approved oenological practices. Regulation EU 2019/934 authorises specified oenological practices that can be used to produce and conserve wine. The instrument amends the regulation to update those practices to reflect updates to the International Organisation of Vine and Wine’s—or OIV’s—approved methods, which largely already exist in EU law.

The UK is a member of the OIV, and its recommendations form the basis of domestic, EU and many third countries’ wine production rules. The instrument will ultimately ensure that wine producers and importers have access to the latest technological developments and wine-making practices, in line with EU law. The UK and Welsh Governments are making the same changes for England and Wales.

Before laying the instrument, the Scottish Government carried out a consultation through Citizen Space and directly contacted major stakeholders. The consultation ran from 31 August to 8 October. Although major stakeholders such as Wine GB and the Wine and Spirit Trade Association did not respond, they had previously responded to the UK Government’s consultation on the proposals, and the response to that was generally positive. There were five respondents in total to the Scottish consultation, which came from individual members of the public, and their responses advised that there would be either a positive impact or no impact from the proposed regulatory changes. The instrument was also notified to the World Trade Organization technical barriers to trade committee, but no comments were received.

I hope that my comments have been helpful in outlining what the instrument is for. I am, of course, happy to take any questions that the committee might have.