Despite the possibility of a better outlook for Scotland’s cereal growers this year, structural issues within the grain trade could have a serious impact on how well these opportunities are realised, a leading economist has warned .

Speaking at the on-line Arable Scotland event on Tuesday, SRUC’s senior rural business consultant, Julian Bell, pointed to the effect which the lifting of the US tariffs on malt whisky exports could have on the demand for both malting barley and wheat, along with the steady global recovery from the Covid-19 pandemic.

“And so far this year there has been a substantial increase in the use of wheat by distillers – with an additional 13%, or 80,000 tonnes being used to date.” He said that this increase was partly due to the high price of maize – and with more distillers switching to using home-grown wheat, he raised the possibility of the Scottish crop regaining the premium payments which it had lost in recent years.

But despite there being less spring barley grown in England, the sharp upturn in Scottish yields in recent years meant that supply of malting barley was likely to remain reasonably high and he predicted a trade similar to that seen last year.

However, Mr Bell pointed out that the sharp reduction in the number of companies available to buy Scottish grain was also likely to play an important role in producers’ returns.

While the consequences for individual businesses caught up in the Alexander Inglis administration were significant, the loss of this buyer could have a significant impact across the market, especially coming on top of the purchase of WN Lindsay by Simpsons.

“So local issues are set to play a major role in the Scottish market this year,” he pointed out, adding that collaboration amongst growers and the creation of a farmer owned co-operative grain-buying group could allow farmers to diversify their outlet options. The other approach at farm level would be to diversify the crops they grew and reduce the industry’s reliance on growing barley.

One of those taking up the latter challenge was Angus farmer and founder of Soil Essentials, Robert Ramsay, who has been involved in setting up a co-operative group to grow hemp.

He said that, rather than wait for government incentives or grants to start up, the group had decided to grasp the nettle and start growing the crop, focusing on a food variety which was already grown successfully in Finland.

But even away from agronomy, growing the crop had not been plain sailing – and he criticised some of the regulation surrounding the cultivation of this crop which, he said, had none of the psycho-active substances present in other varieties of hemp.

Mr Ramsay said that while it was awkward from the point of view of an individual grower not being able to apply to the Home Office until January for the licence required to permit the crop to be grown, from the point of view of setting up a serious co-operative venture with the aim of capturing markets and planning ahead, he said this hurdle was an 'absolute nonsense'.