RESPONSE TO THE ENVIRONMENT AND RURAL DEVELOPMENT COMMITTEE STAGE 1 REPORT ON THE CROFTING REFORM ETC BILL Introduction 1. Ministers acknowledge the Committee’s conclusions and welcome support for proposals within the Bill. 2. In response to concerns raised in the Committee’s report the Executive will: • drop the sections of the Bill relating to the constitution, status and role of the Crofters Commission • drop the sub-sections of the Bill referring to market value of a croft • drop the proper occupier proposals • instigate a wide-ranging Inquiry into crofting issues including the market for crofts, and the status, role, functioning and powers of the Crofters Commission. The Executive acknowledges that these proposals have not attracted consensus support either in the Committee or in the wider crofting communities. 3. The Executive welcomes the fact that the following key proposals in the Bill were supported by the Committee, and confirms that these proposals will go forward: • on Interposed leases which would enable crofting communities to purchase these leases as part of crofting community buy-outs. • permitting the Crofters Commission to challenge neglect of a croft in place of the landlord • allowing the extension of crofting tenure outwith the crofting counties, • enabling the creation of new crofts without a crofters right to buy that croft • ensuring that the Register of Crofts will be accurate and comprehensive. These provisions did attract particularly strong support and will be welcomed in a number of communities. On Arran small-holders have shown strong interest in the proposal to allow the extension of crofting tenure. On Gigha and Colonsay the community development companies are seriously considering creating new crofts using the provisions proposed in the Bill. 4. This Response addresses the Committee’s conclusions and recommendations under the broad themes set out in the Stage 1 Report. It addresses the Report with changes to the Bill and clarification or explanations where these have been requested by the Committee. Vision for the Crofting Reform Bill The Committee acknowledged the widespread feeling that a vision for crofting has not been developed and then used as the foundation for the Bill. The Committee considered that it would have been preferable to engage crofting communities and other interests effectively around that before proceeding to legislate. 5. The Bill was developed as part of the Land Reform agenda to implement the Land Reform Policy Group’s objectives for crofting legislation. The vision for the Bill was 1 set out in the White Paper on the Crofting Reform Bill. The proposed Inquiry will be given a wide remit to examine crofting issues as well as look at the role and functioning of the Crofters Commission. The Inquiry will be expected to consult and engage proactively with crofting communities on their vision for crofting before reaching conclusions. Reform of the Crofters Commission (Paragraphs 170-266) The role and performance of the Crofters Commission was discussed at length during the Stage 1 Inquiry and much criticism was directed at the Commission by witnesses. 6. The Commission was criticised for not using its powers. Some witnesses did not understand the constraints of crofting law and blamed the Commission for failing to use powers it did not have. However, it is clear from the Committee’s Report that there is no consensus on the Commission’s role. Whether or not the Commission has the right powers and enough powers needs to be considered further and the proposed Inquiry will be expected consider these issues. 7. Amendments will be brought forward at Stage 2 which will withdraw sections 1, 2, 2A, 2B, 4, 8 and 9 of Part 1 of the Bill. All these sections relate to the Crofters Commission constitution, status and how it functions and these issues will be considered through the Inquiry. 8. This means that for the moment the Commission will not be empowered to develop and operate different local policies. Power to impose charges for Commission decisions and to require crofters to supply maps at their own expense will be withdrawn. For the moment the Commission will be unable to create, develop or operate its own grant schemes. Register of Crofts The Committee were astonished that an adequate register had not been produced despite it being a statutory obligation on the Commission for over 50 years and it is essential that this failure is now rectified. 9. The Commission is reliant on tenants and owner-occupiers to notify it of changes in tenure and ownership, and such notifications are not always made. Therefore the Commission does not always receive up-to-date information about the owners and tenants of crofts. The 1993 Act provides no mechanism which enables the Commission to require that this information is provided. The technology to maintain a map based Register on an electronic format exists, but the statutory authority to do so does not. The measures in sections 5 and 7 of the Bill are critical to improving the Register since these sections create sanctions for failing to provide data that will ensure that the Register can become complete and up to date. 2 New Crofts The Pressures on Crofting (Paragraphs 22-34) The Committee acknowledged that market forces are having an unrestrained and damaging effect on crofting and considered that the Executive must continue to consider ways to dampen the market. 10. The introduction of the proper occupier proposals aimed to go some way to dampen market forces and ensure that croft owners and prospective croft owners understood that ownership of a croft carried obligations. We welcome the Committee’s acknowledgement that these proposals are worthwhile, while recognising their preference that a simpler approach could have been found through the legislation. 11. The Executive plans that the issues around market forces be considered by the Inquiry. Creation of new crofts by a landowner (Paragraphs 50-76) The Committee welcomed the ability to create new crofts. They considered that there were a number of concerns and practical details which need further consideration. These were: • Provision of more clarity on how communities should develop their ideas • The size of eligible holdings which could become crofts • The status of small landholdings • The effect of converting small landholdings into crofts would have on the tenanted agricultural sector • Interaction with the community right to • How new crofts were to be allocated • Lending to crofters. 12. The Executive agrees with the Committee that guidance should be given to communities and individuals that are contemplating seeking the designation of an area outwith the crofting counties as an area in which crofting tenure should operate. After the Bill is enacted secondary legislation will set out the procedures required to provide clear guidance. This guidance will consider the interaction with the community right buy. 13. The Crofters Commission keeps a record of people who have indicated that they wish to acquire a croft. The list indicates expressed demand and it is impossible to establish the real level of serious demand. Breaking down the data on an area basis does not reveal how demand could be met by creation of new crofts. Many people on the list are prepared to move to a new area to obtain a croft, and from past experience, any proposal to create new crofts generates demand from near and far. The Commission’s list is unlikely to drive the creation of new crofts. The main driver for creating crofts is likely to be initiatives by land-owners. Community and public sector land-owners are thought to be the most likely initiators of new crofts. However, in recent years private landlords of crofting estates have shown a willingness to re-organise croft land to create new crofts. 3 14. The proposal for turning smallholdings into crofts was developed on the basis that this opportunity should be available to tenants of smallholdings which were akin to crofts in terms of size and value. The 30 hectare size limit is based on the normal expectation as to the size of a croft. Small landholdings were originally created on the same basis as crofts and were of similar size. The proposed limit in the Bill will therefore exclude very few small landholdings. A new higher limit would create a new and even more arbitrary cut off. 15. It would only be possible to bring the status of smallholders into line with crofting or agricultural holdings legislation by alternative primary legislation – this is beyond the scope of the Crofting Reform Bill. The proposals in the Bill are designed to enable existing croft sized small landholdings to become crofts. It could prove difficult to justify the cost of preparing further specific legislation for small landholders given that it is currently possible for a landlord and a tenant to negotiate other arrangements. Small landholder tenure is unlike crofting tenure and is not a burden on the land which must carry forward to a new tenant. 16. There is no lower limit on the area of land which can be let as an agricultural holding and there is land which has been let as smallholdings under this form of tenure across Scotland. The difference between the respective rights to buy available to crofters and agricultural tenants is not anomalous as it merely reflects the differences between the forms of tenure. 17. We intend to monitor the situation regarding the effect that conversion of smallholdings into crofts may have on the overall tenanted agricultural sector and will continue to look to the existing industry led Tenant Farming Forum for advice and information about developments within the tenanted sector of Scottish agriculture. 18. The selection of tenants for new crofts should be a matter for the organisation or individual who creates these new crofts.