6 Policy context and funding mechanisms
6.1 The policy context and Scottish Government's economic strategy
Appendix I describes the overall policy context for goose management and the fit between the National Policy Framework ( NPF) and the Government Economic Strategy. The conclusion is that, whilst geese are not mentioned explicitly in the Economic Strategy, the NPF objectives are broadly compatible with the overarching "common purpose". As noted by Slee et al. (2009), precise mapping of particular rural policies to the strategic objectives, priorities, outcomes and indicators is difficult. Nevertheless, goose management fits reasonably well with the strategic objectives of "wealthier and fairer" and "greener" plus the strategic priorities of "supportive business environment" and "effective governance". That is, the NPF seeks to balance the commercial interests of farmers and crofters against environmental requirements and to do so in a manner that delivers value for (taxpayer) money through administrative efficiency whilst maintaining stakeholder engagement and a degree of local autonomy.
More narrowly, goose management also sits amongst an evolving set of rural land use issues. For example, relationships and trade-offs between issues such as food security, energy security, climate change and biodiversity are currently being debated as the SG devises a Land Use Strategy. As such, the relative prioritisation of goose management and the NPF's fit with other rural land use policies is not necessarily fixed. For example, the siting of wind farms on migratory flight-paths or a drive for higher agricultural production could be at odds with current goose policy. On-going reform of the Common Agricultural Policy ( CAP) is highly relevant here in that the nature and purpose of the dominant form of public expenditure on rural land management is somewhat uncertain. This may have a bearing on the scope for continuing or modifying the geographical coverage and operation of goose schemes both within or outwith CAP mechanisms.
6.2 Funding sources
The public good nature of wild geese populations makes it difficult for market mechanisms to reward those incurring costs through supporting such populations. Hence farmers may suffer damage to grazing and crops and/or expend effort in managing geese but they are generally unable to capture the value accruing to segments of the general public.
6.2.2 Market returns
In principle, some market income can be derived from wild geese through the sale of associated recreational opportunities. But not all farmers incurring costs will be able to reap even modest market returns, and in crofting areas where shooting rights lie with estates, crofters may have no current market opportunities. As such, whilst not unimportant, private sector sources are unlikely to be sufficient to generate the magnitude of funding required to offset the aggregate private costs associated with managing populations of wild geese.
6.2.3 Club support
As an alternative, environmental NGOs (such as the RSPB or NTS) could use income from membership subscriptions to either compensate farmers directly, and/or manage geese on land purchased in part for that purpose. This would be an example of converting a public good to a club good, with a group (club) of benefit recipients (i.e. members, plus visitors to reserves) paying directly for the maintenance of populations. In practice, the scope for this is constrained by internal NGO policies and competing demands on subscriptions but also, perhaps more importantly, by the externality effects of geese on adjacent land and the typically fragmented nature of land ownership in many areas. That is, even if an NGO undertook management at its own expense on its own land, spill-over effects would almost inevitably be felt by its neighbours and further costs would be incurred 31 . As such, whilst again worth noting, voluntary sector funding is also unlikely to match the aggregate private costs associated with managing populations of wild geese.
6.2.4 Mixed source funding
As an extension to pure NGO funding, it is possible that partnership arrangements could be envisaged whereby NGO (or private) funding is (partially) matched by public funding. That is, both the UK and EU offer various public programmes to support projects designed to research/demonstrate/initiate environmental improvement activities. However, such programmes tend to be for one-off rather than on-going expenditure and thus have limitations for underpinning longer-term scheme commitments. The EU LIFE programme has co-financed a number of projects relating to bird management in different parts of the EU 32 and there is a LIFE funded programme for conserving machair habitats and species which will provide some funding for goose management ( RSPB, 2009) (see Appendix G). The EU-funded INTERREGIIIC programme 33 could be explored for funding for future development work (e.g. to share best practice with respect to goose management design; as it aims to promote partnership working between Member States across the EU to develop "new solutions to economic, social and environmental challenges"). It is unlikely to be suitable to replace core goose scheme funding however.
6.2.5 Public funding
The implication of the above is that on-going goose management schemes will require continued and regular public sector funding. Since their inception, the various schemes have been funded by the public sector through the SNH budget, most recently under the Natural Care programme banner. The mechanics of this are fairly straightforward in that SNH draws upon its block sponsorship funding from the SG and administers payments to scheme members itself. This arrangement is perhaps unsurprising given that responsibilities for geese management are a closer fit with SNH's remit than the remits of other Scottish public sector bodies with an interest in land use and the natural environment
However, the Natural Care budget (as an explicit budget heading within the block funding from the SG) is being reduced over time with the intention of complete elimination by  34 . This largely reflects the movement of some other elements of the programme into the SRDP from 2007, accompanied by a switch in funding mechanisms away from SNH to the SRDP. This was part of a wider drive by the SG and its various land use agencies to seek internal (i.e. public sector) efficiency savings in the administration of grant schemes and to present a consolidated and simplified process for applicants and claimants.
More specifically, on-going reform to the CAP and the advent of a new programming period (i.e. 2007 to 2013) was viewed as an opportunity to brigade a wider variety of grant schemes related to land management under the common banner of the SRDP, mainly in the form of Rural Development Contracts ( RDCs), themselves an evolution from the earlier (more limited) Land Management Contracts ( LMCs). From an applicant's perspective, this had the effect of offering closer to a "one-stop shop" in terms of (at least initial) official points of contact and paperwork, whilst behind-the-scenes some aspects of scheme administration were reallocated between public sector bodies. The latter was also facilitated by the creation of SEARS (Scotland's Environmental and Rural Services) as a new umbrella body across nine partner bodies, including SNH.
Transferring administration of Natural Care schemes into the SRDP could be viewed as having a positive effect on available funding. That is, whilst the current funding through Natural Care is entirely from domestic sources (i.e. the sponsorship transfer from SG to SNH), expenditure under the SRDP represents a mix of domestic and EU funds. This means that achieving a given level of expenditure on geese would require less domestic funds within the SRDP than outwith it. For example, if co-financed at 50%, 35 £1m would require only £0.5m of domestic funds.
However, this apparent potential gain is offset by three further considerations. First, although calculation of the net transfer to and from Brussels is hindered by public accounting procedures (including treatment of the Fontainebleau Rebate), EU funds underpinning both Pillar I and Pillar II of the CAP are infact linked back to domestic taxpayers through Scotland's share of the UK's contribution to EU finances. As such, the distinctions often drawn between direct EU, modulation and domestic contributions to the Pillar II budget are to some extent meaningless - they all ultimately derive from domestic taxpayers.
Second, regardless of how different segments of the budget are reported, the overall level of funds available is more-or-less fixed. That is, whilst the Sterling value of (fixed) EU Euro contributions has increased over the past year as the exchange rate has shifted and there is often some scope for virement between budget headings within the Scottish Government, the overall level of funding available for SRDP measures is severely constrained - especially given the general state of public finance currently. Consequently, adding (e.g.) goose schemes to the SRDP would not by itself lead to an increase in available funding even if the relevant portion of the SNH budget was also transferred across to the SRDP.
Third, following-on from the second point above, even within a narrowly-defined sphere of public activity such as land use and the natural environment, 36 competition between possible alternative uses means that security of funding for a particular form of expenditure (such as goose management schemes) is not necessarily guaranteed. For example, numerous agri-environment measures are available under Axis II of the SRDP and it is generally acknowledged that the available funding is insufficient to meet all aspirations. As such, continued funding of a given level of expenditure under a particular scheme will depend on how it is prioritised against other schemes; on how decisions about funding allocations are made.
Although highlighted with reference to the SRDP, all three points hold more generally. In particular, the last point regarding security of funding applies equally to the current and future position of payments made through SNH. That is, the past and current Natural Care programme budget reflects some (iterative) processes within SNH and between SNH and the SG to identify and agree policy priorities and the funding deemed necessary to achieve these. If the Natural Care budget disappears but the goose schemes remain within SNH's administrative remit, a similar process will again be followed, albeit under a different budget heading, with implicit or explicit trade-offs being made against other areas of SNH expenditure. Exactly the same type of processes are required within the SRDP, although differences in the apparent complexity (e.g. number of decision stages, number of decision making units) may differ, leading to differences in perceived transparency of decision making.
Consequently, debates about the allocation of budgets and responsibilities regarding the management of protected geese are not just about the justification of public expenditure on geese but also the relative merits of alternative administrative arrangements for achieving this. That is, it is apparent that goose management schemes require public funding and that processes for prioritising this against competing demands are required. Whether these are best secured through the narrower administrative focus of a satellite public body such as SNH or the broader focus of central government is open to debate. Nevertheless, it is possible to identify a number of issues that may be raised by EU and domestic stakeholders regarding a shift from the former to the latter.
6.3 Geographical restrictions
The current goose schemes are restricted geographically, largely reflecting the predominant species and level of damage. However, such restrictions are permissible under the RDR and indeed some elements of the current SRDP are already restricted - notably other former elements of the Natural Care programme (e.g. eagle monitoring, raptor feeding). The extent to which such restrictions are necessary/desirable is hence more a policy rather than an administrative issue.
6.4 Prescription flexibility and complexity
The various individual goose management schemes have evolved over time and display a high degree of complexity and flexibility in terms of their management prescriptions plus variation of these between different areas. The need for variation between schemes could perhaps be encompassed within the SRDP through offering each current scheme as a separate option or (more likely) as a sub-option under a "gateway" option (although either could increase administrative complexity, a criticism already made 37 about the integrated nature of the SRDP). Equally, the apparent complexity of different management prescriptions under each scheme could be accommodated through a similar tiering or menu of prescriptions potentially applicable within a given scheme.
However, the close involvement of local officers in not only inspecting scheme compliance but also advising on management and playing an active role in managing (public) scaring equipment may not be compatible with the RDR. Certainly no existing SRDP measures involve public employees in such a manner, and Commission expectations appear to be of a more hands-off role. Equally, clarification may be required of the order in which scheme applicants are enrolled and management prescriptions are agreed - apparently the Commission has expressed concerns in relation to other habitat/wildlife measures in the SRDP that applications are being accepted prior to farm visits to determine the local conditions and appropriate management responses to be funded. That is, flexibility of schemes and public advice may conflict with bureaucratic requirements for independent verification and inspection roles.
6.5 Payment rates
Whilst State Aids clearance has been gained previously 38 for the goose schemes as part of the Natural Care programme, it appears that payment rates have not be subjected to intensive scrutiny by the European Commission or other independent assessors. Moreover, they have apparently been arrived at by an ad hoc process of negotiation between local goose management groups and the national forum, with input from RPID and SNH staff but little (or no) formal input from independent expert sources. This is in contrast to the more rigorous approach adopted for agri-environmental scheme payment rates under the SRDP (as required under Article 53 of the "Implementing Regs") 39 .
Given the prescribed limits to calculation of payment rates under the RDR, it is possible (but not certain - further analysis of the current schemes is needed) that significant revisions to existing payment arrangements could be required if goose management schemes transferred to the SRDP. That is, payments for income foregone and costs incurred, plus limited transaction costs, would be permissible but variation in payment rates between schemes - currently justified on the basis of local conditions 40 (e.g. transport costs, availability of land) but also perhaps reflecting the ad hoc nature of negotiations to date - would need careful explanation and could well be viewed (by the Commission) as too wide.
6.5.1 Payment basis, limits and double-funding
SRDP payments for goose management could potentially be offered under either Natura (Article 38) or agri-environment (Article 39) measures. For the former, payments may be linked explicitly to costs incurred and income forgone as a result of regulatory constraints associated with the Birds, Habitats and Water Framework Directives. As such, any payments could be viewed as compensatory in nature. However, they are effectively restricted to designated sites (i.e. SPAs) rather than surrounding areas affected by wild geese. By contrast, agri-environment payments are not so restricted geographically and are intended as a form of incentive payment to encourage voluntary uptake. This is reflected in the allowance of transaction cost elements alongside costs incurred and income foregone in payment calculations.
In both cases, maximum payment rates per hectare are specified. Specifically, the maximum is set at â'¬200/ha for Natura, whilst agri-environment payments are capped at between â'¬200 and â'¬900 - although a ceiling of â'¬450 to â'¬600 is probably applicable to Scotland. These limits should be adequate to finance the current payment levels.
In addition, possible overlaps between goose management schemes and other elements of the SRDP (e.g. grass buffer strips for pollution control) would also need to be identified to avoided double-funding of essentially the same activity or outcome. However, such double-funding checks and constraints apply to domestically-funded schemes as well as EU ones and it appears that mechanisms are already in place to cross-check between different schemes, thus implying little additional effort would be required in practice.
6.6 Monitoring, verification and additionality
Recent experience with the transfer of other elements of the Natural Care programme to the SRDP has revealed European Commission concerns about the monitoring of compliance with and achievements of schemes related to management of habitats and wildlife species. These echo more general Commission concerns (prompted by the European Court of Auditors) about verification of activities and the additionality that they deliver 41 . This suggests that moving goose schemes into the SRDP might require additional efforts to demonstrate more clearly, for example, the magnitude of a local geese population and damage to agricultural crops and/or the natural environment.
Elements of the Natural Care programme that have already been shifted into the SRDP have been added as options under the Rural Priorities scheme and the assumption is that (if it were moved to the SRDP) goose management would follow suit. However, given the existing structure of Regional Proposal Appraisal Committees ( RPACs) s and the National Proposal Appraisal Committee ( NPAC) for RPs, it is not clear where the NGMRG and LGMGs would fit into governance arrangements.
Specifically, since RPACs and NPAC are responsible for funding decisions, NGMRG would perhaps be restricted to an advisory role. Moreover, whereas the NGMRG/ LGMGs currently design individual schemes and payment rates, RDR constraints make it likely that this role would fall more to SG officials - again limiting the NGMRG to an advisory role. Given the history of goose management schemes (and well-publicised criticism of RPACs 42 e.g. see Cook Review) this is unlikely to be well received by domestic stakeholder bodies. 43
Some of this awkwardness could perhaps be avoided by retaining goose schemes as a separate entity within the SRDP rather than adding them as options within RPs. That is, although most attention is focused on RDCs, the SRDP also encompasses a limited number of stand-alone payment schemes. For example, most notably LFASS but also processing & marketing grants and the forestry challenge fund. These have separate governance arrangements outwith RPACs, and thus it might be possible to retain the NGMRG in some decision-making capacity - although reduced involvement in scheme design and (especially) setting payment rates would still be required
As an aside, in addition to RPs, RDCs also include the non-competitive Land Manager Options ( LMOs). These include several agri-environment measures and, in principle, could be expanded to include elements of goose management. However, LMO measures are generally relatively simple and, moreover, funded relatively modestly. Hence LMOs are unlikely to be able to accommodate many elements of the current goose schemes, although more minor elements (e.g. minimum payments) might be adopted.
6.8 Security of funding
As noted above, the long-term security of funding for goose management schemes would arise as an issue regardless of whether goose schemes remained within SNH or were transferred to the SRDP. However, the respective governance arrangements may have a bearing on the likelihood of funding security and, moreover, may differ in the transparency of decision making.
In particular, whereas both SNH and RPACs need to prioritise across a range of funding choices, SNH is (broadly) confined to an environmental remit whereas RPACs are doing so across all three Axes of the SRDP. As such, it may be that RPACs would attach relatively less importance to geese, thus potentially reducing funding more readily. In principle, the NPAC could oblige relevant RPACs to fund goose management schemes, but such a blanket obligation is somewhat at odds with the spirit of the regional structure and the additional layers of decision making might render the process less transparent.
Again, retaining goose schemes as stand-alone elements within the SRDP might preserve greater transparency and security of funding. However, the SRDP structure does not encompass explicit ring-fencing for any component and virement between different schemes in order to manage expenditure patterns and/or respond to changing political priorities is always possible. 44 This is also true of (e.g.) the SNH budget, but assurances of ring-fencing here are perhaps more tenable given the narrower remit and track record of funding.
6.9 Administrative and negotiation costs
The concept of goose management is clearly compatible with the RDR, and incorporating a version of such schemes within the SRDP would probably be administratively feasible. However, such an exercise would not be costless in terms of either the administrative effort required to redraft the SRDP or the potential political capital expended in achieving its modification.
First, drawing-up and gaining approval for a modification is a fairly lengthy and involved procedure, requiring various domestic and EU consultative processes and entailing a significant amount of input by civil servants. Second, experience shows that gaining EC approval can involve changes beyond the narrow bounds of the specific measure(s) being suggested. That is, the Commission has, on occasion, withheld approval of modifications as a means of applying pressure for change in other parts of the SRDP or indeed implementation of other EU policies (e.g. NVZs and LFASS).
Whilst geese are not mentioned explicitly in the SG's Economic Strategy, the NPF objectives are compatible with the overarching "common purpose". Goose management fits reasonably well with the strategic objectives "wealthier and fairer" and "greener"; plus the strategic priorities of "supportive business environment" and "effective governance".
A number of funding sources currently contribute to goose management and this is expected to continue. Voluntary sector funding contributes to goose management especially through provision of reserves. Mixed funding in the form of an EU LIFE programme ( RSPB, 2009a,b) will contribute in a number of locations from 2010. However, these sources will not match the aggregate private costs associated with managing populations of wild geese. Hence continued goose management will require continued public funding.
To date public finance has been derived from domestic ( SG) sources. The main public funding options in the future are either domestic or a mix of domestic and EU, the latter being principally through a revised SRDP. The drive towards closer integration between public bodies and a desire to deliver policy through a single one-stop-shop for a variety of schemes means that there is an SG interest in whether administering goose schemes through a future SRDP would be feasible.
There is also an apparent gain to the SG budget from delivering via EU programmes in that the domestic contribution is reduced. A single funding mechanism ( SRDP) also (in principle) provides a mechanism for comparing the merits of different directions for development and environmental expenditure.
However, in practice the overall level of SRDP funding is broadly fixed such that inclusion of geese could lead to (depending on prioritisation) increased competition and reduced security of funding both for goose management and for other SRDP components. Conditions imposed by the Commission would have profound implications for the operation of goose schemes and the effectiveness of policy delivery. These aspects are discussed further in Chapter 7.
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