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Land-Care's response to Maurice Hankey:

"Towards a modern rural economy: enterprise or regulation"

James Irvine

Editor, www.land-care.org.uk
Teviot Agriculture, Cultybraggan Farm, Comrie, Perthshire
Teviot Scientific, Edinburgh

Filed 19 May 05
©www.land-care.org.uk

At the Scottish Countryside Alliance (SCA) conference "Getting the balance right: rural Scotland 2005" Maurice Hankey was the third of three speakers in the section "Towards a modern rural economy: enterprise or regulation". His particular topic within this brief was enterprise. The full transcription of his paper is published on Land-Care (1) through the courtesy of the speaker and SCA. The purpose of the present article is to review Maurice Hankey's presentation.

Membership of a quango

He opened his talk by declaring an interest as a member of the quango, Scottish Agricultural Wages Board. He emphasised that in his opinion this quango should be got rid of as soon as possible as it was no longer required on account of "new European legislation".

He went on to say that he "perhaps didn't believe that a few years ago". In my view this is a disingenuous statement as national legislation was in place that equally made the Scottish Agricultural Wages Board redundant these few years ago (2). But it was Maurice Hankey who illogically supported it against opposition from many members of the organisation of which he was then director, the Scottish Landowners Federation (SLF). As I recall, when his participation in supporting the continuation of this redundant quango was revealed, the reason given (it is alleged) was that the Agricultural Wages Board was convenient for some of the SLF's members with large enterprises in forestry.

In my view he let down many of the membership of the SLF who did not own large forestry or other such enterprises, and who could see no reason why agricultural workers should be given higher minimum rates of pay than any other type of worker. It is my understanding that when the Scottish Agricultural Wages Board was reviewed those few years ago national legislation was every bit as effective as what he now refers to as "new European legislation".

Is this another example of the misuse of words that Ian Mitchell was talking about in the preceding paper (3)? Maurice Hankey's previous stance in relation to the Scottish Agricultural Wages Board was not helpful to those who were trying to make enterprises in agriculture work in Scotland - indeed, quite the reverse.

Omnibus survey of small businesses in Scotland 2002: rural analysis

The bulk of his talk was taken up with regurgitating - in a remarkably uncritical manner - the findings of a report commissioned by the Scottish Executive called "Omnibus Survey of Small Businesses in Scotland 2002: rural analysis". This survey was carried out by a firm in Birmingham called Data Build. It produced its final report in 2003 (4).

Not only is the report considerably out of date, but one would have thought that as the previous Director of what was then called the SLF, and now in his capacity as Director General of essentially the same organisation now called Scottish Rural Property and Business Association (SRPBA), he might know what the views of his members are. But apparently not.

One of the reasons that I felt it necessary to resign from the SLF (and in so doing from its central region committee) was that the organisation was not sufficiently in touch with the views of its members (2). I did not join the newly named organisation, so I have no direct knowledge as to whether its executive now takes proper cognisance of the views of its members when supposedly representing them. However, since it is essentially the same people running it (5), this may not be the case.

It might have been fine to describe the findings of the report commissioned by the Scottish Executive if that report had been competently done, such as to provide meaningful results. But throughout his talk there was scarcely a word of critical appraisal, confining his comments about some of the results as "surprising". Nor did he make any comparison between the findings of the report and what his own membership may have been telling him.

The problems with the Omnibus survey are probably common to many such surveys, but they are nonetheless severe and must influence the validity of its findings. One wonders if they are not in fact a waste of taxpayers' money.

As confirmed by checking directly with the author of the programme at Data Build, the long and complicated questionnaire (consisting of 275 headings, most of which contained a range of choices requiring to be read out and answered) was carried out by "cold calling" businesses. The operation was said to "take about 20 minutes", so those participating had to come up with some pretty prompt replies. The questionnaire can be view in Appendix 2 of the report (4).

The participants did not have sight of the questionnaire before they were phoned, nor did they know they were going to be phoned. There must therefore be some doubt about the value of such "off the cuff" comments. The fact that "this is the way these surveys are done" does not remove the intrinsic problem over the quality of the data input. It was noted that when I "cold called" the author of the report she wanted me to put my questions in writing. Although the report was completed some 3 years ago, many of the problems with it are likely to be intrinsic in many such studies, be they earlier or later. Also, there would have presumably been discussion with the Scottish Executive and others about the content of the report and its conclusions subsequent to its publication.

Even the most cursory of analysis of the report reveals major problems with the representation of different types of business in the 6 different classes of area within Scotland, depending on how far they were from masses of population of different sizes. These problems were such that the categories "urban" and "small town" required to be amalgamated to enable an attempt at analysis.

Table 1: Geographical areas (reproduced from the Omnibus Report)

When it came to different types of businesses, the numbers in some categories are clearly not sufficient to make firm conclusions. There was an imbalance between the numbers participating in the survey in the broad categories of "urban/small town", "accessible rural" and "remote rural". No matter how clever the SSPS software might be that was used to produce a system of weighting to compensate for this, the basic flaws in the data must lead to the significance of many of the conclusions being open to question. Consequently there can be little wonder that some of the findings were "surprising" and some of the omissions "interesting".

Table 2: Size of business (reproduced from the Omnibus Report)

Reviewer comment: it is difficult to deduce from the report just how the businesses with 0 employees were selected, as they constituted the vast majority of businesses in rural Scotland.

Another remarkable feature of the survey is that in many parts of it the single person business (with no employees) were discarded - because "there were too many of them and they would have distorted the results", said the author of the report. Perhaps the message here is that there are too many problems over employing people, so it is better to use other self-employed persons or contractors.

Table 3: Business activity (reproduced from the Omnibus Report)

One question that the Scottish Executive did not arrange to be included in the survey was whether the political environment affected the success of the business. The Executive probably considered it was not appropriate for them to do so, but of course it is highly relevant in terms of the success or otherwise of small businesses. It may be no accident that the Scottish economy in general is a matter of concern, lagging as it does significantly behind that south of the border.

Table 4: Unprompted and prompted obstacles by geographical area (reproduced from the Omnibus report).
Reviewer comment: On account of the limitations on the statistical significance of many of the results, it is inappropriate to suggest accuracy by giving results to a decimal place. The margin of error in some instances is likely to be of the order of +/- 5-10%.

When the respondents were asked to rank the obstacles they had mentioned, the report states that "nearly one in every five Scottish businesses considers the economic environment to be the greatest obstacle to the the success of their business". The next most commonly cited are sales/competition, tax and regulations". But the survey did not even try to identify what factors within the economic climate, regulations and tax were the most troublesome to Scottish rural businesses.

What was surprising was the apparently relatively low concern about "employing, keeping, training staff" as reported in the Omnibus survey. It is widely perceived that a key difficulty in UK business in general is finding suitable staff that are so necessary for business innovation to be achieved. The universities and colleges while turning out ever increasing numbers of graduates are failing to produce graduates with qualifications suitable for business enterprise - large numbers certainly, but quality and relevance doubtful.

What is also surprising is the omission of the impact on rural businesses of transport costs. These are particularly severe in the remoter parts of rural Scotland.

Nor did there appear to be any mention of the difficulty over the availability of living accommodation for employees in rural areas. House prices in attractive rural areas are often beyond their reach due to houses or building plots being bought by city dwellers for second homes, or by commuters who turn villages into dormitories, or being bought by wealthy elderly persons retiring from the cities to enjoy the rural idyll.

There is in fact little wonder that the vast majority of small businesses in the remoter parts of rural Scotland do not employ anybody other than the director of the single person company. But in general they were excluded from the survey. A relevant question would have been to ask them what was holding them back from employing anybody.

Quite apart from the Omnibus Report, Magnus Linklater In his article "Linklater's Scotland: once a nation of adventurous entrepreneurs" (6) writes:

"The statistics are dramatic and depressing. Scotland is averaging a growth rate of 1.6% compared to 2.7% for the rest of the UK. This amounts to £1 billion pounds a year we are failing to make, and places us down near the bottom of the European league table. Look through the recruitment pages of the newspapers and almost all the careers on offer are in the public sector rather than in private companies. Nationally more than half of all salary-paying jobs are in the public services, compared with 42% in England. What that means is that the best prospects, the most security, the highest guarantee of pensions for young graduates are in careers funded by the taxpayer. For the more adventurous, the ones who want to build wealth rather than benefit from it, opportunities are likely to be sought elsewhere"

Many farming businesses see the political environment as being strongly hostile to their economic success, both through political intent and through government mismanagement. As far as farming is concerned the clear intent of the Scottish Executive through direction from its political masters is to prefer "conservation" and "biodiversity" over economic survival, irrespective of the propaganda that says otherwise. Witness the management chaos over the reform of the Common Agricultural Policy (CAP) that has been created by a combination of Brussels, DEFRA and the Scottish Executive (7). When Scottish farming businesses are thrown into disarray many other business that support them suffer likewise.

Not a word was there in the Omnibus Survey report about the EC, but that also may be a politically taboo subject for the Scottish Executive when canvassing opinion. But the EC with its endless directives and inhibitions is one of the main obstacles to success of small businesses in rural Scotland, especially farming and those related to it. There was also no mention that I could see as to possible problems relating to the role of environment agencies, such as SNH, SEPA and other bodies such as the National Trust for Scotland, etc with all their officialdom and single focus outlook (8, 9).

While such surveys may give comfort to the Scottish Executive in so far that it can say that it is doing something about small businesses in rural Scotland, the fact is that such surveys will achieve very little, and what they do supposedly achieve may be seriously flawed by the poor quality of the data on which they are based.

Rather than paying a private commercial company based in Birmingham to try and find out what has gone wrong with businesses in rural Scotland, it would have been better for the Scottish Executive to talk to Scottish rural folk themselves. In the absence of that, the organisation People Too came into being. Its founder, Kirsty Macleod recently gave a presentation entitled "Our countryside - we live here" (10) which provides more insight as to what is wrong than any Birmingham-based cold-calling telephone survey that circumvented some of the most important areas of concern.

Should office bearers of SLF/SRPBA hold senior positions in government funded bodies such as MLURI and SNH?

Maurice Hankey's bibliography provided by the conference organisers (1) states that he was on the Board of Governors, Macaulay Land Use Research Institute (MLURI) from 1998 to 2005. Michael Gibson is currently on the Board of Governors, MLURI and was a vice-convener of the SLF from 2000 - 2002 having previously been chairman of its agricultural committee and chairman of its Highland committee. The current chairman of the Board of Directors of SRBPA, John Don was a Governor of the MLURI when he was a vice-convener of the SLF.

Robert Balfour, on relinquishing his post as vice convener of the SLF joined the East Region Board of Scottish Natural Heritage (SNH) but continued to be chairman of the SLF's Access and Tourism committee.

It is a condition of taking up such appointments that persons are in agreement with the aims of such organisations. But the aims of SNH and of MLURI were and are not necessarily the same as those of the membership of the SLF or of its successor, SRPBA. To quote a previous Land-Care article (11):

"It is not in the interests of all members of the SLF to necessarily agree that:

*the politically fashionable but essentially meaningless "sustainability" creed for Scottish farming is the way forward;

*nor that effectively uncontrolled open access to farms as proposed by SNH is compatible with good farming, conservation or competent business management;

*nor that Scottish farming should be put at further disadvantage compared to other major EU countries;

*nor that quality meat production should be sacrificed along with everything else on the alter of promoting farm land as a place for "the people" rather than as a place for quality food production;

*nor that it is such a good idea to encourage those with scarce farming skills to diversify out of the industry.

It would appear that, unbeknown to many of its membership, some senior members of the executive of the SLF have for some time been quietly and inappropriately committing themselves to promoting the policies of government. At least some of the SLF membership thought they were there to try to persuade government to modify its policies along more realistic lines in terms of land management.

What comes hard is the thought that the SLF executive may have been stringing the membership along with all sorts of assurances as to its motives, but all the while undertaking other commitments which may conflict with the interests of the membership but which advance their own.

If there is a lack of trust in the executive it will matter little what future name it chooses to call itself."

Young farmers

In keeping with the line taken by Ross Finnie, Minister for the Environment and Rural Affairs at the Scottish Parliament, Maurice Hankey extolled the opportunities created by reform of the CAP in terms of "opening up the market"(12).

But the reality is very different as he surely must know. The supermarkets have a destructive grip as they indulge in food price wars between the few that remain to the severe disadvantage of food producers. By advocating total decoupling from production (while the French have retained production subsidies to the full) the nearest available export market has been made substantially more difficult for the foreseeable future. There is also the problem of the exchange rate between the £sterling and the euro. There is also word that the UK government key officials are not being as effective as they could be in promoting UK exports (13).

The Land Management Contract fiasco created by SEERAD does little to help quality beef production in Scotland or its marketing, concentrating in its 17 options on "environment" when there is little wrong with much of the "environment" in Scotland.

Also SEERAD has learned the hard way that its business diversity schemes have not had the uptake that it would have liked, presumably on account of the fact that Scottish farmers are more aware of potential markets than SEERAD are prepared to give them credit for. Indeed, belatedly SEERAD is now proposing that such business schemes might actually be restructured in 2006 to help support what is actually needed by farmers to keep them in business (14). Anything to do with helping farmers to farm was excluded from the initial Farm Business Development Scheme. The dangers of entering such a scheme were clear to see (15). But it has taken 5 years for the situation to be rectified. Such poor direction on the part of government is not an encouragement for young people to start a career in farming.

Hankey in his presentation claimed that CAP reform was "creating opportunities for young people who were keen to enter the farming industry". He said:

"I was at a conference a few weeks ago on the future of agriculture where there were a lot of young farmers and I can use only one word, they were desperate for opportunities to get into this industry. When so many people bemoan the fact that they can't make a living out of agriculture, there's an awful lot of youngsters out there who would dearly love to get into it. So those who can't make a living out of agriculture, should, perhaps put some thought to how they can use the new mechanisms to move over because there are people there who believe they can."

But unfortunately for Hankey the SLF (and in all probability its successor) have over the years shown little interest in the commodity aspects of farming. Indeed, as I recall, its agricultural committee had decided on total decoupling before it had even taken the views of its regional committees - such as that of central Scotland on which I was a committee member for a number of years. In the event the decision taken by the agricultural committee was supported by the central region committee, many of its members being solicitors, estate agents or horse or fishing enthusiasts, and only a few with direct responsibilities for significant numbers of livestock as their main business enterprise.

Just how many commercial farmers are represented by the SLF/SRPBA is not known, but the impression is that this variously named organisation has little interest in the business success of farming as such. "Let us move on from the past", advocates Hankey - thus leaving behind the international reputation Scotland has enjoyed over generations for quality beef production. Just another of Scotland's icons left abandoned in the name of "progress".

But is not Hankey, along with Finnie (and I daresay the SAC who are largely subsidised by SEERAD) misleading young people with idle promises of goodies in the future? Older people, such as myself, are dismissed by Hankey on the grounds that "if you cannot come up with good ideas, then get out and let younger people in". It might make easy copy for Hankey, but it is seriously disingenuous to mislead young people to think that there is a good future career in farming in Scotland when the evidence is strongly to the contrary. That could lead to much cruel disillusionment in the young.

There are in fact abundant opportunities for young people to come into farming, if they have the right training and are prepared to work and to learn. What is not really wanted is an excess of young people going to universities or colleges purporting to give them training in the theory of land management in the faculty of arts and social science, but not actually able to do much other than to "advise" others who do the work (16). Such is the skill shortage that some Scottish farmers are actively searching for immigrants from the new member States of the EU to come and work in Scotland, because they simply cannot get any adequate response to advertisements for staff in this country to look after livestock. Why should young people be encouraged to take on the responsibilities for farms when they are not prepared to do an adequate apprenticeship on other people's farms? But as Magnus Linklater pointed out (see above) able young people see better long-term prospects if they seek work in the cities.

The Scottish Executive has added a further obstacle to the young by its ill-conceived Agricultural Holdings (Scotland) Act, whereby the duration of farm tenancies that are permitted are seriously prescribed in a manner that is absurd. But here again, the SLF had a hand in advising SEERAD over the matter.

Hankey not the only one doing Scottish farming a great disservice

But Maurice Hankey is simply swimming with the tide, created in this instance not by the moon but by a coterie of academics with little interest in farming but strong interest in "biodiversity" and "conservation" and, of course, in keeping in with government to ensure their continued funding (17, 18, 19, 20)

Conclusion

The paper Maurice Hankey presented at the Scottish Countryside Alliance conference "Getting the balance right: rural Scotland 2005" helps to clarify why the economy of rural Scotland continues to be in such turmoil. His paper illustrated how the organisation that he once directed (SLF) and the one (essentially the same but under another name) that he now directs (SRPBA) has been and continues to be less than helpful. Indeed he and his executive colleagues may have been misleading many of its membership for rather a long time while sitting at the government's negotiating table as a "stakeholder".

©www.land-care.org.uk `

References

1. Hankey, Maurice (2005). "Towards a modern rural economy: enterprise or regulation"
Part 5: Session 4c SCA conference "Getting the balance right: rural Scotland 2005" 12th April, Edinburgh.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 04 May 05, www.land-care.org.uk Click Here to View

2. Irvine, James (2003). Why I resigned from the Scottish Landowners Federation.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 21 Nov 03, www.land-care.org.uk Click Here to View

3. Mitchell, Ian (2005). "Towards a modern rural economy: enterprise or regulation".
Part 5: Session 4b SCA conference "Getting the balance right: rural Scotland 2005"
12th April, Edinburgh.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 02 Apr 05, www.land-care.org.uk Click Here to View

4. Scottish Executive (2003). Omnibus survey of small businesses in Scotland: rural analysis
http://www.scotland.gov.uk/library5/enterprise/ossbs-00.asp

5. http://www.srpba.com

6. Linklater, Magnus (2005). Linklater's Scotland: once a nation of adventurous entrepreneurs. Scotland on Sunday 15th May 2005. Reproduced on Land-Care with kind permission of the author and the newspaper.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 11 Apr 05, www.land-care.org.uk Click Here to View

7. Editorial (2005). "Increased flexibility for farmers" announces Scottish Executive: but far too late for 2005 summer grazings.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 11 Apr 05, www.land-care.org.uk Click Here to View

8. Robertson, Liz (2004). SNH and the Isle of Arran. A case study presented at the People Too conference "Who governs rural Scotland" 29th October, Perth.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 19 Nov 04, www.land-care.org.uk Click Here to View

9. Irvine, James (2004). "Lack of logic or science is now the political fashion, but is it a good idea?" Based on a paper given by John Stewart entitled "From voodoo to windfarms: mumbo-jumbo rules". People Too conference "Who governs rural Scotland?" Perth 29th October 2004
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 01 Mar 05, www.land-care.org.uk Click Here to View

10. Macleod, Kirsty (2005). "Our countryside - we live here" Paper given at Conservative Rural Action Group meeting, Perth, 26th February 2005.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 06 Jan 05, www.land-care.org.uk Click Here to View

11. Irvine, James (2003). So the SLF wants to change its name: but more than a change of image is needed.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 24 Dec 03, www.land-care.org.uk Click Here to View

12. Irvine, James (2003). Review: SAC OUTLOOK Conference: "Benefiting from Change" Murrayfield Stadium, 16th November 2004
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 23 Jan 05, www.land-care.org.uk Click Here to View

13. Walters, Rex (2005). Exports: key members of the UK government letting us down.
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 07 May 05, www.land-care.org.uk Click Here to View

14. Pate, Euan (2005). "Changes in farm support scheme find favour". The Courier and Advertiser (Dundee). May 14th 2005, p14.

15. Irvine, James (2003). A report on "New Enterprise - New Beginnings". Farmers Workshop, Coupar Angus, June 2001
See SCOTTISH OUTDOOR ACCESS CODED Homepage, filed 16 Jan 03, www.land-care.org.uk Click Here to View

16. Editorial (2003). SLF appoints an access officer with no training or experience in farming/agriculture.
See SCOTTISH OUTDOOR ACCESS CODED Homepage, filed 04 Oct 03, www.land-care.org.uk Click Here to View

17. Irvine, James (2003). Does SNH conduct itself as an honest broker or as a political manipulator?
See SCOTTISH OUTDOOR ACCESS CODE Homepage, filed 25 Oct 03, www.land-care.org.uk Click Here to View

18. Irvine, James (2003). Arrogance of academics pontificating on rural affairs. Are they letting us down?
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 14 May 03, www.land-care.org.uk Click Here to View

19. Irvine, James (2004). "Scotland's land" RSE conference 30th September, 2004
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 04 Oct 04, www.land-care.org.uk Click Here to View

20. Irvine, James (2005). Comment on Roger Wheater/Alex Hogg session, SCA conference "Getting the balance right: rural Scotland 2005" 12th April, Edinburgh
See SOCIAL/ECONOMIC/POLITICAL Homepage, filed 27 Apr 05, www.land-care.org.uk Click Here to View

Finis