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2010 Review of Goose Management Policy in Scotland

2010 Review of Goose Management Policy in Scotland.

304 page PDF

2.3 MB

304 page PDF

2.3 MB

Contents
2010 Review of Goose Management Policy in Scotland
4 The economics of goose management: its public benefits, value for money and cost-effectiveness

304 page PDF

2.3 MB

4 The economics of goose management: its public benefits, value for money and cost-effectiveness

4.1 An economic perspective

From an abstract economic perspective, the policy "problem" arising from wild geese populations may be interpreted as one of market failure. Specifically, the mobile nature of geese and the lack of private ownership of them mean that (in the absence of public policy interventions) private management of geese is unlikely to be economically or ecologically optimal.

For example, under-management (i.e. overly large populations and associated over-grazing) may lead to negative externalities in the form of damage to agricultural crops and to other species (with a possible loss of environmental features and biodiversity). Equally over-management (i.e. too severe control of goose numbers) may also lead to negative effects not only on goose population viability but also on the functioning of ecosystems of which they are part.

The degree of protection specified in the EU Birds Directive reflects scientific concerns over the ecological vulnerability of particular species populations and their biodiversity importance, with different species attracting different degrees of protection.

Under an adaptive management approach, the policy task becomes one of determining an acceptable (target) population level for each species and then selecting the level and type of policy effort needed to achieve and sustain this. Whilst the first element essentially lies with the European Commission 18 and scientific advice on population viability and adaptive management (not least since the migratory behaviour of geese requires population analysis to be conducted at a pan-European if not wider scale), the second element rests at the domestic level. That is, what is the most effective mix of policy instruments to ensure compliance at least domestic cost?

4.2 Economic value of geese

The economic value of geese is primarily derived indirectly through their contribution to ecosystem services rather than directly through income and employment generation in the provision of marketable goods and services. That is, whilst there are some commercial opportunities for tourism-related enterprises (e.g. birdwatching visits, shooting trips), the majority of the benefits arising from wild geese are distributed diffusely across current and future members of society in terms ecosystems' supporting and regulating functions and quality of life benefits. On the negative side, geese may cause damage to agriculture and impact negatively on biodiversity.

4.2.1 Opportunities for goose-related income and tourism

Geese may also provide benefits to farmers and landowners through shooting (private and commercial) and also to local communities if geese induce additional visits to an area. Our interviews indicated that commercial shooting of quarry species (principally Greylag and Pink-footed Geese) can produce significant revenue in certain areas of Scotland although farmers and estates were reluctant to quantify the magnitude of the income they received. The RSPB/ BASC (1998) study estimated that goose shooters injected £1.96m per year into the Scottish economy although only £202,000 of this was in payments to farmers.

The income from shooting may partially or totally compensate for the costs of damage by geese, with the result that in some areas geese are not an issue despite considerable numbers. A goose issue may arise if commercial shooting is restricted or not allowed (e.g. problems occur outside of the shooting season) and damage occurs for which there is no countervailing income opportunity.

Commercial shooting is not an option for specially protected species, which can only be shot under licence. Hence in the LGMG areas, it is only around the Loch of Strathbeg and in the Western Isles that there is commercial shooting.

Our interviews with farmers and crofters located few opportunities for increasing incomes from goose watching or associated activities (e.g. goose-related bed and breakfast). Geese, can undoubtedly provide an important reason for tourism in areas where large numbers are present (e.g. Islay) and RSPB/ BASC (1998) estimated that goose watching brought expenditures of £269,000-£346,000 per year to Islay's economy and £1.5m to Scotland. Even so, at the margin, it seems most unlikely that even substantial changes in goose numbers in these areas would have any impact on tourism because considerable opportunities for viewing exist, the numbers are large and the geese widespread. In the chapters that follow, we have decided therefore that geese tourism should not be considered a major driver of future goose policy.

Consequently, despite incurring costs, there are practical limits to the ability of land managers to capture the public good value of geese in the form of monetary exchanges between producers and consumers. This highlights a tension under the Scottish Government's ( SG) economic strategy in that promoting environmental quality through regulation can be at odds with promoting commercial productivity and competitiveness.

4.2.2 Public benefits from geese

The only valuation of the public benefits from geese is that of Macmillan et al. (2001) (also reported by Hanley et al. (2003)). It used choice experiments and contingent valuation ( CV) to elicit the preferences of different groups of people 19 and their willingness to pay ( WTP) for goose management. The aggregate public benefit (the Scottish population's WTP) for policies that avoided a 10% fall in 'endangered' goose species was £6.8m per year. The benefit from a 10% increase in the population of endangered species was £10.2m per year. There was no evidence for a WTP for increases in goose numbers beyond 10%: in fact Islay residents were willing to pay £13 per household to prevent a 50% increase in numbers - indicating that large increases in goose populations result in welfare losses to local residents and that they are wiling to pay to prevent such increases.

The qualitative and quantitative research suggested that the public favoured conservation polices that targeted endangered 20 species. The public were not prepared to pay more for conservation measures that extended conservation to non-endangered species. To interpret this within the current policy context it is necessary to identify which species (if any) can be classed as endangered. It seems that Macmillan et al. (2001) did not define this term clearly and in order to apply their results we need to make some assumptions. We consider that only the Greenland White-fronted Goose might now be so classed since other species are in favourable conservation status, at least at a Scottish scale. Hence the preference research suggests that, in terms of conservation measures, the public may only be wiling to pay for policies that focus on this species.

Even if the benefit estimates were to be scaled down to reflect recent changes in disposable incomes the aggregate benefits from protecting endangered species remain large and much higher than the public expenditure costs of current policy ( ca £1.6m per year). NGMRG (2005) concluded from an assessment of the same basic data that "the compensation payments made by the government to farmers for damage caused by wild geese represented good value for money to the taxpayer". In so far as these payments assist in preventing a population becoming endangered, the conclusion is still justified. However, the overall Scottish goose population increased substantially between 2000 and 2010 and this changes the interpretation of the preference study from that given in Scottish Executive (2005).

The increase in the total number of geese in the main areas of policy concern (scheme areas 21 plus Orkney 22 ) is around 76% for the 10 years 2000-2009 (see Table 2.5). The increase in the Scottish goose population is approximately 17% (Table 2.5) over the same ten years. The preference research was unclear about the benefits from a 17% increase but gave no evidence of public support for increases of the magnitude of 76%. Local residents indicated a WTP to avoid major increases in goose populations.

In the light of the increase in total goose numbers over the last decade the preference research can be re-interpreted. The research suggests that policy to enhance the Greenland White-fronted Goose population (assuming this is considered to be 'endangered') provides VFM. But the research provides no support for a policy that benefits further increases in the populations of Barnacle, Greylag and Pink-footed Geese if these are considered non-'endangered' species. There is no support for further increases in the total goose population. In so far as population changes reflect policy intervention, we question whether policy at the margin is delivering VFM for Barnacle Geese (where population growth has been 29-37% over the last decade) and there is no support for any expansion in the overall goose population.

4.3 Population growth and the costs of damage

Growth in the goose population in scheme areas and Orkney has been around 76% over the last decade (around 5.8% per year). For scheme areas alone, it has averaged 2.2% per year. While it may be desirable that the populations of certain species are maintained or increased, the overall impact on agriculture is one of increasing potential damage. Any increase in population is likely to have a social cost where geese graze agricultural land, and this will impact on public expenditure if additional payment schemes are instituted.

Damage costs as measured by payment rates in the LGMSs vary from around £15 to £52 per goose (see Table 4.3). Marginal damage costs within existing schemes are likely to be similar, particularly where payments are linked to goose density. The evidence from Daw and Daw (2001) suggests that marginal damage costs may be higher than average costs in areas where densities are low but increasing.

Using the lower end of the cost range (say £20 per additional goose), a continuing increase at 2.2% per year implies an additional damage cost of around £87k 23 per year rising to £958k after ten years if the population expands unchecked and at this rate. A continuing increase of 5.8% per year would have much more dramatic cost implications.

In practice, it is to be expected that other factors may limit the rate of population growth and associated damage. Nevertheless, the risk remains that, without intervention to control increasing damage, social costs could rise very substantially without any compensating public benefits. It might be argued that farmers should bear some of the damage cost, at least for non-Annex 1 species, if they are given the opportunity to address the causes of damage. However, experience indicates that when damage becomes uncontrollable there is pressure for public support. There could therefore be a high budgetary cost associated with a policy that fails to address the potential for further increases in goose numbers.

The initial route for controlling damage is to address any legal constraints that currently restrict farmers' ability to control damage by legitimate shooting. This has zero budgetary cost (from the current goose scheme budget at least) and responds to the preferences indicated by the farming interests consulted as part of the current study. Even with some relaxation of constraints, there is no guarantee that farmer and sport shooting will adequately contain the level of damage in all cases. This aspect is discussed below.

4.4 Shooting, sale of carcasses and egg control measures

4.4.1 Public preferences in relation to shooting

Respondents in the public surveys (Macmillan et al. 2001) were asked about preferences for or against shooting. They were offered a choice of 'means of control': either habitat management; or habitat management plus shooting. The general public and visitors to areas had a preference against shooting, although this was not the case with Islay or Strathbeg residents.

There are two problems with interpreting these results. First, the habitat management alternative to shooting was not described to respondents, and it is not clear what it comprises or whether it exists as a feasible alternative. Hence the choice set was unclear and this could have biased the WTP. Hanley et al. (2003) have questioned the extent to which the general public's responses take account of conservation realities.

Second, preferences differed amongst subsets of the population and it is not clear whose preferences are most important for policy - those affected by the policy (residents) or those paying for the policy (the general public) (Hanley et al. 2003). Nevertheless, we conclude that where management of numbers is a policy goal, shooting is not a generally preferred option if other options exist. However residents in the areas studied were indifferent to shooting - for them control was more important than the method by which it was achieved.

4.4.2 Background to management within LGMSs

Table 4.2 indicates where shooting or lethal scaring takes place under the LGMSs. Publicly funded shooting of Barnacle Geese takes place under licence as part of the LGMS on Islay, and of Greylag Geese on Tiree and Coll, and on the Uists. Commercial shooting of quarry goose species is important around Loch of Strathbeg, on Tiree and Coll, and on the Uists. On Tiree and Coll and the Uists, reducing goose damage through population management was the prime concern expressed to us by the crofting community. However, shooting rights lie with the estates who are generally unwilling to allow crofters to shoot because of interference with the estates' commercial shooting interest (Sections 16.6 and 16.7). The NFUS has also proposed this as the method of choice in areas where (principally Greylag) goose damage is increasing (e.g. Orkney). On Orkney, Greylag Geese are legal quarry during the open season but farmers wish to see some relaxation of shooting regulations (Section 17.2). The desire expressed by these stakeholders is to manage populations at an acceptable level in order to maintain agricultural activities and incomes without reliance on direct payments to farmers.

Table 4.2: Shooting in relation to location and scheme

Local goose management group

Commerical shooting of quarry geese?

Shooting funded under the LGMS?

Islay LGMG

No

Yes (lethal scaring of Barnacles)

Kintyre LGMG

No

No

Solway Barnacle Goose Management Scheme

No

No

Loch of Strathbeg LGMG

Yes

No

South Walls LGMG

No

No

Tiree and Coll Goose Management Scheme

Yes

Yes (Greylag)

Uist Greylag Goose Management Scheme

Yes

Yes (Greylag)

On Islay, around 650 Barnacle Geese are currently shot annually to reinforce non-lethal scaring techniques and reduce the level of agricultural damage. This is permitted under derogation from the EU Birds Directive, although the legality of the activity has been questioned by some stakeholders (Section 2.2.5).

There has been widespread representation to this review from farmers and crofters, especially those suffering Greylag Goose damage, regarding measures that would facilitate shooting as a damage control mechanism.

4.4.3 Licences to shoot: stakeholder views

The current licensing legislation and its implementation are considered by many farmers to be unduly restrictive, for the following reasons:

  • The perceived delay and bureaucracy involved in granting licences is said to deter farmers from applying and may mean that damage is already severe before a licence is granted. SGRPID has not been able to provide us with detailed information on the delay that occurs between licence applications and decisions and how this relates to the two bodies involved ( SNH and SGRPID). SGRPID quote 14 days as an average time between application and granting of a licence. Instances of much longer delays have been brought to our attention, although it appears that, in situations where damage is routine, turnaround can be fast.
  • Licences have conditions attached that place restrictions on who can shoot and the type of shooting that can take place. These constraints restrict damage control and increase policy costs and have no clear benefits in the goose context.
  • Some stakeholders suggested that an extension of the open season for quarry species would help to facilitate damage control but others doubted that this would increase sport shooting, which has a well-defined winter season.
  • Some stakeholders requested that Greylag Goose should be added to the 'general licence' (Schedule 2 Part II of the Wildlife and Countryside Act), to permit shooting throughout the year. They believe this would have a significant impact on the ability of farmers to engage in shooting and lethal scaring in the current closed season, when resident geese can cause damage. Given the considerable population growth and increased damage that has occurred in the last decade, this is perceived as the single most effective route to reducing the social cost of geese. It would be a move welcomed by farming interests.

We deal with these suggestions further under policy options in Chapter 7.

4.4.4 Sale of carcasses: stakeholder views

A number of stakeholders have argued for the removal of restrictions on the sale of goose meat, both to provide more financial incentive for shooting, easier disposal of carcasses (which may limit shooting, particularly if numbers shot increase), and to allow the production of goose products as a source of local income. Conservation interests have pointed out: that restrictions on sale to date have been an effective conservation mechanism; it would be important to restrict legal sale to specified species and have mechanisms in place to trace the source; and to guard against a change leading to the shooting and sale of vulnerable species (particularly Greenland White-fronted Goose).

Stakeholders felt that carcass values are unlikely to provide a major, additional incentive to shoot, either by farmers or for sport. But removing a restriction on farmers' ability to address the causes of goose damage would be welcomed by farming interests.

We have not assessed the market opportunities for geese and goose products because this would require a separate study that covers a wider range of stakeholders (see Section 2.7.5).

4.4.5 Bag limits: stakeholder views

A number of stakeholders held the view that the basis for setting limits is not always clear, and that there is a case for reviewing procedures, especially for out of season licences, in areas facing rapid population growth of quarry species. In such cases some find it difficult to see any justification for bag limits. The current derivation of bag limits and future recommendations are covered in Sections 2.2.4, 2.2.7 and 2.7.4.

4.4.6 Reporting: stakeholder views

The majority of stakeholders expressed concerns about inadequacies in reporting of numbers shot, both under out-of-season licence (although there has been marked improvement in this in recent years; Section 2.2.6) and more importantly for quarry species. We consider the shortfalls for recording numbers shot for quarry species in Section 2.7.3.

4.4.7 Egg control measures: stakeholder views

Egg oiling measures for Greylag Geese have been taken under licence in the Uists (see Appendix G for details) and we understand that a licence has been issued for egg oiling in 2010. The costs of egg oiling as compared with shooting are not clear because of the limited experience with oiling and the fact that costs will vary depending on the location and accessibility of nests. It is clear, however, that egg oiling is not as effective at reducing numbers of geese (and thus reducing damage) as removal of adult birds (Trinder et al. 2009). Some local people have been enthusiastic about engaging with egg oiling to reduce evident damage, giving a strong case for facilitation. This is particularly so in crofting areas where shooting rights remain with the landlord, such that crofters cannot directly address damage by shooting. In other areas with increasing Greylag Goose issues, such as Orkney, it is less clear how oiling could operate without public assistance and oiling was not raised by farmers as a preferred mechanism for addressing damage. We consider egg control as one of the suite of measures available for reducing agricultural damage further in Chapter 7.

4.5 Costs of local schemes

The seven local schemes are described in detail in Appendix G and individual scheme data are provided on the scheme areas, numbers of farmers receiving payments and so on. Summaries are given in Table 4.3. The total cost of operating these schemes in 2009-10 is expected to be around £1.56m, £1.30m of which is in payments to farmers. The cost per goose data are taken from Appendix G and based on 2009/10 or 2008/09 data depending on availability. Costs for the two years are generally very similar because schemes changed little between these years. The goose numbers used to derive costs per goose in the payment schemes refer to those counted on areas receiving payments within the schemes. For the non-payment schemes the total Greylag count is used.

Table 4.3 Costs of the local goose management schemes: the total cost per goose includes all costs of operating the scheme. The number of geese supported in payment schemes refers to geese counted on fields where farmers receive payments and is the number used in the calculation of payments. In non-payment schemes, the total number of geese is used. Numbers supported (and costs per goose) will vary with year. Note that it was not possible to make meaningful calculations of the area (hectarage) of each scheme or number of payment recipients that would allow comparisons between schemes because of the differing methods schemes use to present these data (see Appendix G).

Local goose management group

Total cost
(2009-10)
(£'000)

Cost of payments to farmers
(2009-10 (£'000)

Approximate number of geese
on farms receiving payments

Total cost
(£ per goose)

Cost of payments
(£ per goose)

Payment schemes

Islay LGMG

997

908

45,700

21.8

19.9

Kintyre LGMG

110

77.4

2,110

52.2

36.6

Solway Barnacle Goose Management Scheme

241

220

6,740

35.6

32.6

Loch of Strathbeg LGMG 24

85.4

74.9

5,450

15.7

13.8

South Walls LGMG

27.8

21.8

930

30.0

23.5

Non-payment schemes

Number of greylags

Tiree and Coll Goose Management Scheme

35.4

0

4,270

8.3

N/A

Uist Greylag Goose Management Scheme

64.2

0

6,100

10.5

N/A

4.5.1 Comparison between schemes

Table 4.3 gives the costs of operating the schemes and the cost per goose supported. For schemes that make payments to farmers, we have used counts made on fields receiving payments as the best indicator of the population supported by the schemes. This includes payments for scaring areas on Islay, although these are so small that their exclusion changes goose numbers by only 0.4%. We exclude geese counted on scaring zones not receiving payments since local schemes differ in the size of these zones, and scaring zone areas could be increased as a ploy to reduce the apparent cost per goose.

Nevertheless, comparisons must be made with care because of differences in scheme structure, systems of payment, farming systems, goose species (their weight 25 and grazing habits) and length of the grazing period. Total costs vary between £15.70 and £52.20 per goose (Table 4.3). The Kintyre and Solway schemes appear the most costly per goose directly supported but in dairying areas account has to be taken of the opportunity cost of dairy output which is typically higher than for other livestock ( SAC, 2009b). In Kintyre there are 'overpayments' mainly due to the way the per ha rates are scaled in relation to goose density (see Appendix G). The Solway count and payment data are less reliable than those from the other areas since the local group was unable to provide us with a comprehensive and transparent database that linked goose counts to farms/fields and payments, which was available for each of the other payment schemes. This is indicative of the variability in the transparency of reporting systems that is noted elsewhere in this report, and may in part reflect different level of staff resourcing available to the local goose groups in each area.

The Strathbeg scheme has the lowest cost per goose of the schemes that involve payments to farmers, and this reflects not only the short operational period of the scheme (2 months) but careful selection of fields by the group to provide grazing for the largest number of geese possible within the budget.

Costs per goose overall are lowest for the Coll and Tiree, and Uist schemes. Here, expenditure is only on scaring and shooting and the costs cannot be directly compared with those for the payment schemes.

Whist schemes vary in cost per goose supported, they may also vary in their effectiveness in delivering policy. For example, the relatively low cost scheme (per goose) on Islay does not appear to be delivering policy objectives for the Greenland Whitefronts there (Section 2.5.3). This is not to say that that increasing expenditure would resolve the situation or produce any additional policy benefits. It indicates that differences between species and contexts make the concept of cost-effectiveness ( CE) very difficult to apply across schemes. It is more productive to assess how the CE of individual schemes may be improved.

4.6 Increasing the cost-effectiveness of payment schemes

4.6.1 Damage estimates

It was not within the remit of the current study to measure the actual costs of goose damage and their relationship with payment rates. In the formal responses to our questionnaire survey, one national stakeholder NGO did raise the need to further establish links between actual damage and payments to farmers. In developing future goose policy, it is important to bear in mind that the degree of agricultural damage does not necessarily increase in proportion to the numbers or density of geese present because so many other (human and natural) factors also have an influence on grass/crop growth.

Current payment rates are based on agreed estimates of the lost output and additional costs associated with goose management. Since a central tenet of the NGMRG is to obtain VFM from government expenditure, one might conclude that NGMRG negotiated payment rates that were the minimum to deliver policy. However, this would be naïve given the overarching goal of maintaining consensus. There may be scope for alternative bases for payment.

It was not within the remit of the current study to measure goose management costs and to re-assess their relationship with payment rates. Any research to review the true costs of managing for geese would involve surveying a large sample of farms with the inherent difficulty that farmers may engage in strategic over-pricing in their responses. This was a problem evident in the main source of damage costs currently available (undertaken for the Scottish Executive on Islay and at the Loch of Strathbeg; Daw and Daw, 2001). Daw and Daw adjusted their data to remove farmer estimates that they regarded as incredible. Even so, that study does not provide a basis for assessment of the suitability of current payment rates for two other reasons:

  • The estimates are not recent, and major changes in the system of agricultural support and in prices have occurred since 2001; and
  • The published damage estimates may not be relevant to the particular focus of a scheme. For example Daw and Daw (2001) found that in the area around the Loch of Strathbeg, 77% of the damage costs were arable-related (lost output, additional inputs and reduced winter cereal hectarage) but the Strathbeg scheme does not offer compensation for these items.

4.6.2 Willingness to accept

From the point of view of policy effectiveness, a more informative approach is to consider what farmers might be willing to accept ( WTA) as a payment in order to elicit their entry into a scheme. The price/participation curve is fundamental to cost efficiency since payment rates would ideally be set at the minimum to elicit the required level of participation. The WTA measures the compensation required to comply with scheme obligations. Although we asked farmers in our interviews what was the minimum payment they would be WTA in order to enter the local scheme, little reliable evidence was obtained. In most cases they were unwilling or unable to give firm responses. However, farmers not farming very actively tended to have low WTAs because geese had little effect on output and there were no additional costs.

The contract Steering Group wished us to explore the cost of providing grass for geese presumably as a possible basis for setting payment rates. Table 4.4 gives a budget for a 5-year ley, based on costs given in the SAC Farm Management Handbook ( SAC Consulting 2009, 2010). Clearly costs will vary with circumstances, and remote locations are likely to have higher costs for materials. Reseeding frequency will also vary with grazing density. The figure of £253 per ha does not allow for the fixed costs of farming, which may average around £129 per ha ( SAC Consulting 2009, for Specialist Beef LFA farms). Including this figure gives a cost of £382 per ha.

Table 4.4 Cost of producing grass with re-seeding every 5 years.

Activity

£ per ha per year

Reseeding

Reseeding: lime, fertilizer, seed (over 5 years)

88.0

Contractor charges for ploughing, 2*cultivation, 2* roll, sowing (over 5 years)

29.0

Annual costs

Fertiliser (75 kg per ha) and application

110.0

Sprays and application

26.0

Total direct cost

253.0

However, it is not easy to interpret this cost since geese grazing is a seasonal activity and one that it is normally additional to agricultural enterprises on the same land. Farmers are more likely to base their WTA on the cost to their business of adhering to scheme obligations (e.g. restrictions on scaring and grazing) and the consequent incremental loss in output suffered through participation. This WTA might be expected to be lower than the current basis of cost estimation since it is an incremental cost rather than the total cost currently derived (using a 'no-geese' baseline).

4.7 Generic issues in cost-effectiveness

Before assessing specific routes for reducing cost there are two important structural differences between schemes in the way they operate that may provide pointers for more cost-efficient structures. These are the payment structures (flat rate per ha or related to density) and the zonation system (distributed or zoned). Both payment structures are based on indirect estimates of damage costs, unlike a number of schemes in other countries which we understand use direct field inspections (see Appendix F, Table F2). It was not possible to assess the reliability of such inspections used abroad within the remit of the current study, and we doubt that damage costs could be estimated reliably in this way alone given the knock-on effects of, for example, a reduction in early grass yields.

4.7.1 Flat rate versus density-based payments

If damage varies with density and there is wide variation in density between fields or farms, then there is a case for relating payments to density. On Islay and in Kintyre, payments are adjusted in relation to density, whereas in other schemes they are not.

The only evidence comes from Daw and Daw (2001), who related costs to density in their studies at the Loch of Strathbeg and on Islay. The Strathbeg study was limited by lack of precise density data and inconclusive, although they considered the evidence available supported a linear relationship since geese could fly to ungrazed fields when a sward was fully grazed.

On Islay there are few alternative ungrazed sites and Daw and Daw (2001) found that the relationship between cost and density had a quadratic form (Figure 4.1). The curve shows the estimated damage cost per ha in relation to density. The damage cost curve shows a declining marginal cost with increasing density. At a density of 2 geese per ha, the marginal cost is £17.7 per additional goose per ha, whereas at a density of 11 per ha, the cost has fallen to £0.33.

Figure 4.1 Alternative payment systems

Figure 4.1

Where linear payment systems are used at no stage in our interviews did anyone suggest that this was inappropriate or unfair. If the Daw and Daw (2001) conclusion is correct and generally applicable, then neither the flat rate per ha nor the proportionate approach set payments strictly in relation to costs. For example, if payments are 'correctly' set to compensate for costs at a density of, say, 12 per ha (Figure 4.1), the linear system (as used on Islay and in Kintyre) under-compensates farms at densities <12, whereas the flat rate system (used in the Solway, Strathbeg and South Walls LGMSs) greatly overcompensates farms with low densities.

Because the flat rate system overcompensates at low densities, whatever the assumed shape of the cost curve, it is unsuitable for situations in which participant farms vary greatly in goose density. Where a scheme focuses on creating feeding areas that are all high density, a flat rate system can be efficient in cost terms. It is also administratively simpler to apply, which should reduce transaction costs.

In a devolved system, as exists at present, the local group will decide on the payment system based on perceived 'fairness' and administrative simplicity, rather than cost-effectiveness. We suggest that NGMRG demand a clearer rationale for the payment system from groups based on alternative approaches from analysis of the payment databases. Under a less devolved system, more efficient payment systems could be imposed.

4.7.2 Distributed or zoned schemes

We found that the schemes were generally efficient in their relative pricing of feeding and buffer areas because costs per goose were similar on the two areas (see Appendix G). However, an underlying question is whether zoning is cost-effective.

All the payment schemes use a zoning system 26 as recommended by the NGF and apparently required by NGMRG (2005). In neither case is any reason given for the recommendation but implicit is the idea that a spatial arrangement 27 that facilitates concentration is more 'efficient' than a distributed one in that it minimises aggregate damage. It may also reduce conflict by separating as far as possible geese from agriculture. In most schemes, however, the geese ultimately determine the area designations (and payments) by virtue of their preferences for particular fields. Only one non- NGMRG stakeholder ( GWCT) made comments specific to the zonation system: proposing more 'haven' areas (reserves and feeding areas), although no supporting detail or rationale was given.

Vickery and Gill (1999) reviewed the technical literature and came to no clear conclusion about the relative merits of concentration 28 and dispersion. Where populations are small (they used the example of Barnacle Geese), they concluded that a concentrated approach has more chance of success. With mobile species, such as Pink-footed Geese, Vickery and Gill concluded that concentration may be unworkable, and a number of dispersed refuges might be more appropriate. But site factors were also thought to be important (e.g. proximity of grazing to roosts). There is also a risk that the concentration of goose populations into intensive areas exposes them to higher risk of catastrophic events, such as increased disease risk (e.g. Samuel et al. 2005), or unpredictable bad weather events.

The underlying economic question (assuming no differential impact on the geese) is whether the concentrated or distributed approach is least cost in terms of impacts on farming (and compensation payments). In practice, different fields will have different damage costs and farmers will offer fields where the cost of geese is lowest in order to maximize income. Concentration of feeding areas around a roost will be least cost if the fields are relative low cost and if marginal costs decline with increasing density. Distributed schemes will be least cost where opportunity costs vary and farmers then have the flexibility to select fields. We note that conflict appears to be higher due to excluded farmers in concentrated schemes (Solway, South Walls) than in more dispersed schemes (Islay, Kintyre, Strathbeg). In Strathbeg, imposing constraints on participation such that farmers are obliged to offer linked feeding and buffer areas is likely to raise costs with no obvious benefit.

Nevertheless it is important to offer farmers choices that reflect their preferences. For example, Strathbeg and Kintyre offer the option to stock/not stock and on Islay offering a scaring option (buffer area) was attractive to farmers because some wished to scare. This matching of payments to preferences will potentially increase cost-effectiveness.

Overall, however, we are not convinced that a concentrated (zoned) scheme provides a lower cost route to goose management than a distributed one. It restricts entry to only those farms near the refuge and fails to allow for the ability to select from a wider distribution of costs typical of the larger population of farms. The scaring zones that form part of the concentrated approach also give rise to disquiet from farmers suffering goose damage but obtaining limited benefits from the scheme. However, a distributed scheme must either pay per goose or have strong selection capacity (as at Strathbeg) if payments are set at a flat rate per hectare.

4.8 Improving the cost-effectiveness of existing schemes

Under the current structure, the LGMGs have very little incentive to minimize costs or provide VFM. Maintaining a good working partnership of interests is the paramount concern of the groups. In this sense it is not possible to rely on the local SGRPID or SNH staff to negotiate increased cost-effectiveness. There is little motivation and limited negotiating power. Hence any changes in CE have to come from the NGMRG or Scottish Government. In the past the NGMRG has suggested CE improvements to some LGMGs but these are not often implemented because the local groups have a high degree of autonomy in scheme design and budget allocation. This limits the scope for improved cost-effectiveness.

Of considerable interest to SG are options for reducing the public costs of geese as part of the overall need to reduce government expenditure. In Chapter 7 we examine a number of different institutional structures and funding sources for delivering policy. Here we examine routes for reducing public expenditure costs within the current NGMRG/ LGMG structure . This is not to presume that the current structure is a satisfactory one for delivering policy at acceptable cost in the future.

Before listing options for cost reduction it is important to note that:

  • The Uist, and Coll and Tiree budgets are understood to be taken over by the LIFE project from 2011 ( Appendix G) thus reducing the SG gross goose management budget by up to £100K (Table 4.3), although there remains an SNH contribution to the LIFE project funding.
  • An important element of any new scheme would be to address the evident misallocation of resources and lack of transparency in information in some local schemes. Kintyre has an unsatisfactory payment structure and South Walls has made inappropriate payments (to an organic farmer). Solway has a lack of transparency in its information and there is a need for a thorough review of the scheme boundaries, eligibility, payment structure and reporting 29 .

4.8.1 Cost-reducing options under the present administrative structure

Table 4.5 lists a number of broad cost-cutting options. The draconian option (1) is not to renew or replace the current schemes, which would mean the discontinuance of payments. Whilst this would minimise public expenditure on goose management, there would be strong farmer reaction and an expected return to conflict between interests. It is uncertain whether the legal mechanisms alone could deliver species objectives.

Selective closure of local schemes is a second option (2). In Table 4.5 we consider each existing scheme in turn in terms of the likely effects of its closure, in so far as these effects are predictable.

Options 3 and 4 reduce payment rates pro rata, leaving the distribution of payments either as in 2010/11 or to be decided by LGMGs. The impact of these measures on costs and effectiveness depend entirely on the reduction envisaged. Whilst a small reduction is likely to be negotiable, sizeable reductions would result in reduced participation and a possible breakdown in consensus. What is uncertain is the budget point at which consensus would start to collapse. In schemes where farmers are not heavily dependent on goose income, there is a threat of coordinated withdrawal and resultant breakdown of the scheme. The impacts on effectiveness are difficult to determine.

There are options for reducing expenditure without a high risk of losing consensus. These are removing fertilizer payments (Option 5) and reducing expenditure on monitoring and shooting (Options 6 and 7). A detailed analysis of these options is given in Appendix G. These could reduce total expenditure by up to 20-35% for most schemes and impacts on effectiveness could be small, although reduced monitoring may raise issues of equitability.

We do not see the removal of regional SNH staff time for LGMS coordination (Option 8) as a viable alternative for cutting costs because we see these coordination roles as essential for effective scheme delivery under the current governance.

If concerns over public expenditure required a larger cut in expenditure (for example over 40% from 2009/10 levels), it may be difficult to achieve this from the Options 2-7 without some risk of compromising consensus.

We reiterate that the above assessment relates entirely to the current NGMRG/ LGMG structure, which should not be interpreted as one preferred for the future. In Chapter 7 more radical changes in the current structure are explored to remove inherent weaknesses, reduce costs and improve effectiveness.

Table 4.5: Measures to improve the cost-effectiveness of LGMSs under the current NGMRG/ LGMG structure

Options

SG budget cost saving per year (approx.)

Rationale

Barriers to change

Impacts on future policy delivery

Positive benefits of change

Negative effects of change

Gaps in information that affect decision making

1. No intervention (do not continue to support current schemes and do not introduce any alternative mechanism to deliver policy (i.e. stop current schemes other than those financed under LIFE or under SNH management agreements)

£1.3m

Public expenditure saving. Considerable agricultural support available under SFP, SRDP and LFASS (but see Chapter 6 and Section 7.5).

Risks to conservation status of goose species.

Legal mechanisms and NGO refuges alone are insufficient to ensure delivery of species policy.

Cost saving.

Considerable conflict and political disquiet in some locations. Major impacts on other SNH activities with possible impacts on biodiversity conservation in certain areas.

Cannot reliably predict farmer behaviour or conservation impacts under this scenario.

2. Remove one or more schemes

Islay LGMS

£997K

Not necessarily delivering conservation obligations for Greenland Whitefronts.

See negative effects

Would remove proposed specific intervention aimed at delivering obligations for Greenland Whitefronts.

Cost saving.

Possible benefits for Greenland Whitefront but no clear evidence.

Extreme disquiet amongst farmers due to loss of income and publicly funded shooting.

Loss of most disturbance-free refuges for geese. Secondary impacts on SNH conservation delivery.

Uncertainty about impacts on Greenland Whitefront and Barnacle Goose populations

Kintyre LGMS

£110K

Concerns over current cost-effectiveness.

See negative effects

Would remove intervention aimed at providing feeding areas for Greenland Whitefronts.

Cost-saving

Disquiet amongst farmers. Increased scaring and loss of refuges.

Potential negative impacts on Greenland Whitefront population.

Uncertainty about impacts, particularly on Greenland Whitefronts.

Solway LGMS

£241K

Concerns over relatively high costs.

Concerns over increasing Barnacle Goose population.

Scheme has a number of unsatisfactory features (see Appendix G).

See negative effects

Would leave legal mechanisms and NGO refuges as the sole intervention mechanisms.

Cost saving.

May restrict further expansion the Barnacle Goose population and hence associated damage.

Considerable disquiet amongst farmers who may demand relaxation on shooting.

Uncertainty about precise impacts on the Barnacle Goose populations, although no evident risk.

Loch of Strathbeg LGMS

£85K

Not supporting Annex 1 species or any other species for which there are conservation priorities.

None

Would leave legal mechanisms and NGO refuges as the sole intervention mechanisms.

Cost saving (although not large because the scheme has a tight budget and is efficiently run).

Disquiet amongst some farmers.

Increased scaring and shooting around the RSPB reserve.

Possible impacts on the goose population roosting at the SPA.

Possible impacts on SPA.

South Walls LGMS

£28K

Could be run under SNH management agreements (although this would not necessarily reduce costs).

None

If transferred to SNH - none. If intervention stopped, loss of disturbance free grazing.

Cost saving potential but minor impact on total goose management costs.

Disquiet amongst the farmers due to income loss.

Uncertainty about precise impacts on the Barnacle Geese if scheme stopped and no substitute management agreements instituted.

Tiree and Coll LGMS

£35K

Impacts are on quarry species for which crop damage could be mitigated through shooting outside of a scheme.

See negative effects

Damage expected to increase with negative impacts on crofter incomes.

Cost saving.

Considerable disquiet amongst crofters who rely on scheme shooting to mitigate crop damage.

Negative impacts on viability of crofting.

None

Uist Greylag LGMS

£64K

Impacts are on quarry species for which crop damage could be mitigated through shooting outside of a scheme.

See negative effects

Damage expected to increase with negative impacts on crofter incomes.

Cost saving.

Considerable disquiet amongst crofters who have little facility to control damage themselves (shooting is under the control of the estates).

Negative impacts on viability of crofting.

None

3. Maintain existing LGMGs but reduce payments to farmers by a specified proportion of current costs (across all LGMSs) to meet a new (reduced) overall budget.

Payment cost reduced by % reduction. Other costs unchanged except for changes in labour/contract costs.

A simple and direct route for decreasing LGMS budgets where payments are made.

Negotiability uncertain and would depend on the extent of cut proposed.

Almost no scope for delivering revised species policy with consequent negative impacts on long-term effectiveness.

Delivery of a defined budget. Distribution of payments perceived as fair to all current participants (but not those excluded).

Disquiet amongst farmers likely to increase in proportion to the level of reduction from 'acceptable costs'.

Risk of partial or coordinated withdrawal.

No scope for modifying schemes to increase effectiveness and improve payment distribution.

Uncertainly over degree of consensus and reduction in participation rates.

4. Maintain existing LGMGs but reduce the budget for each LGMS by a specified proportion of current costs (across all LGMSs) to meet a new (reduced) overall budget but allow the LGMG to decide on budget allocation.

Total cost reduced by % reduction.

A simple and direct route for decreasing LGMS budgets whilst allowing devolved allocation of the budget. However, this would not address issues of poor cost-effectiveness within individual schemes (e.g. Kintyre above).

Negotiability uncertain and would depend on extent of cut proposed. Would be preferred to Option 1 by farmers.

LGMGs very unlikely to deliver changes to policy with consequent negative impacts on long-term effectiveness.

LGMGs may become more cost-effective but this is unlikely.

Disquiet amongst farmers likely to increase in proportion to the level of reduction from 'acceptable costs'.

Risk of coordinated withdrawal.

Farmers would negotiate to maintain payment rates at the highest level possible irrespective of policy delivery or effectiveness.

Uncertainly over degree of consensus and reduction in participation rates.

5. Remove fertilizer payments and decrease LGMG budgets accordingly.

Around 25% of payment costs. This is approximately £0.33m based on 2009/10 payments.

Payment for additional fertilizer input is not compatible with SG policy re nitrogen input/climate change.

Little evidence that additional fertilizer is actually applied.

None.

Very limited impact on existing delivery but not a mechanism that will itself produce greater effectiveness in delivery of policy.

Increased compatibility with other SG policies.

Removes payments that in most cases are unrelated to obligations.

Some negative reaction from farmers but the least controversial route to reducing costs.

Need to revise fertiliser costs by applying current prices.

6. Reduce scheme counting - fewer counts per year (e.g. 50% per year) or count every other year or use historic counts.

There are several options here and the less frequent the counts the greater the saving.

Where non-contract staff count, cost savings are less clear.

Reducing counts to international only would save around £30k per year 30 .

Regular counts only provide information on which to base payments and do not provide useful population information because of duplicate counting.

Farmer perception - failure to count geese that use their land adequately - BUT farmers likely to prefer this cut to an equivalent reduction in payments (as under Options1 and 2). Biennial counting could be difficult in terms of contract/staff labour.

No scope for this mechanism to deliver revised species policy with consequent negative impacts on long-term effectiveness.

Minimal impact on PVA/scientific data for population management in areas where populations are counted annually in any case.

In years when there were no counts scheduled, there would be no incentive for farmers to carry out positive management for geese and an incentive to scare more if permitted to do so.

Possible loss of detailed information on distribution of geese within scheme areas which would raise equity issues in payment distribution.

Loss of information on which efficient scheme design can be based.

Could model for optimal number of counts for some areas where counts are very frequent (e.g. Islay) but would be area-specific.

7. Reduce publicly funded Barnacle Goose shooting (Islay).

Up to £24.7K (see Appendix G).

Principally a cost-saving measure. There is very slight support from the public preference research in view of recent falls in the Islay population. However, the Scottish Greenland Barnacle population has increased by 29% over 10 years.

May get less reliable data on numbers shot (a concern expressed by GSAG).

( GSAG would need to demonstrate that possibly more reliable shooting bag information has a value of >£24.7K per year).

Possible increase in Barnacle Goose population.

Conservation organisations would see as positive policy change.

Potentially increased damage and cost to farmers if the population increased.

Farmers would lose a shooting/scaring 'service' but would accept this rather than losing payments.

It may be difficult to re-institute publicly funded shooting once removed should the population increase.

Extent to which farmers would increase private shooting if permitted, so difficult to predict impacts on Barnacle (and Greenland Whitefront) populations.

8. Remove dedicated SNH coordination support for LGMSs (excluding monitoring of geese that is dealt with above).

Saving will depend on proportion of SNH staff member time that is dedicated to goose support role (only Islay LGMS has a dedicated Goose Officer).

Cost saving only.

LGMSs would not function effectively and there would be poor communication between the LGMGs and NGMRG (and a lack of annual reporting).

LGMGs unlikely to deliver changes to policy with consequent negative impacts on long-term effectiveness.

Cost saving only

Coordination roles are essential for effective scheme delivery and fit-for-purpose feedback to NGMRG.

Loss of financial scrutiny from publicly accountable staff.

Do not know what proportion of SNH staff members' time is dedicated to goose work in each of the LGMS areas currently.

4.8.2 Increasing cost-effectiveness of non-payment schemes

Since neither the Coll and Tiree nor the Uist Scheme can be said to be totally effective in reducing damage to a level acceptable to crofters, the emphasis here has to be on how to improve effectiveness rather than reduce costs. Within the current framework, these schemes would benefit from increased funding to support greater population management and damage control on Tiree and Uist ( Appendix G). It is not clear to what extent the LIFE project (see Appendix G. for details) will provide this enhanced budget.

4.9 Conclusions

There is very limited scope for farmers/crofters to obtain private income from geese, except from shooting where this is permitted. Although geese provide a tourist motivation in some areas and hence result in expenditure injections to those economies, it is very doubtful if changes in goose numbers at the margin would have any impact on these expenditures. Hence tourism impacts should not be considered a major driver of goose policy in our view.

Whilst there are public benefits from geese, the preference research indicates support principally for 'endangered' species, which in the current Scottish context may be interpreted as the Greenland Whitefronted goose. The research gives no support for the level of increases in the numbers of other species observed over the last decade. Large increases in goose populations result in disbenefits to many local residents. There can be a high social and budgetary cost associated with increased damage if policy fails to address the potential for further increases in goose numbers.

There is evidence for public preferences against shooting as a means of management if other methods of habitat management are available. However, farming interests strongly support a relaxation on shooting restrictions to enable better private control. Some, but not all, interests favoured a relaxation on the sale of carcasses. We recommend a separate study on this topic to quantity the likely markets and hence possible impacts on goose populations (Section 2.7.5).

The cost of operating the seven current LGMSs is currently around £1.6m per year, of which £1.3m is in payments to farmers. Schemes vary widely in the cost per goose directly supported but between scheme cost comparisons must be made with caution because of different contexts and modus operandi. Schemes vary in their payment systems (flat rate per ha, or per goose) and whether distributed or zonal schemes are used. These different payment systems need a clearer rationale and we are not convinced that the concentrated (zoned) schemes provide a lower cost route to goose management than distributed ones.

There are numerous options for reducing the public expenditure cost of the current schemes. There are specific cost and distributional concerns in relation to Kintyre (an unsatisfactory payment structure) and in Solway (a lack of transparency in budget allocation and costs). More generally there are more or less major impacts on costs from a range of options (See Table 4.4 and 4.5). We consider that up to ca 30% of budgetary cost could be saved by stopping fertiliser payments combined with some limited budgetary capping without seriously compromising consensus or effectiveness. However, this analysis is within the context of the current NGMRG/ LGMG structure, which has serious weaknesses. Several alternative funding and administrative arrangements are examined in Chapter 7.