Handbrake on agritourism sector growth

Policy red tape is ‘strangling growth and recovery’ in Scotland’s agritourism sector, undermining the government’s own ‘Growth Strategy’ for the sector and making the move into diversification for some, unviable.

Despite Scottish Government committing to doubling Scotland’s agritourism offering by 2030, a series of policy developments, proposals and pending changes have been criticised by many in the sector as an attack on rural businesses.

Plans to introduce Short Term Lets Licensing, due to come into force in October this year, will require every single type of accommodation, from a farm cottage to a shepherd’s hut, to apply for a license. Critics have accused the approach as a broad-brush policy, initially aimed at tackling an Edinburgh issue, which will unfairly impact rural Scotland.

There are concerns it adds unnecessary paperwork and additional ongoing costs for businesses, but individual licensing fees will vary across local authority areas, leaving it down to a ‘post-code lottery’.

Problems around planning permission have been an ongoing issue in Scotland for many years and are stifling opportunities to diversify farming incomes and deterring new entrants from exploring new income streams, point out critics.

There is inconsistency between local authorities around what types of agritourism are being granted planning permission and due to poor staffing levels in councils, applications are taking months, if not years to be granted, if at all. The new National Planning Framework 4 legislation has just been passed, which could further discriminate against agritourism businesses who will now have to demonstrate that their accommodation proposals don’t impede rural housing needs.

Another policy coming down the track is the Deposit Return Scheme, which will go live in August, 2023, and will add 20p on to the purchase of single-use drinks containers, with the deposit paid back on return of the item.

The new legislation will mean retailers will have to operate a general return point for scheme containers. Retailers, such as farm shops, have criticised the significant time and admin costs this will add to their businesses, re-allocating personnel and space to store bottles and packaging.

In September, the Scottish Government announced that it will be bringing forward legislation to give local authorities the power to introduce a tourist levy/tax. A Local Visitor Levy Bill is expected to come before the Scottish Parliament this spring, with charges to be enforced as early as 2026.

This will mean that everyone staying in accommodation in Scotland will have to be charged a local tourist tax, which in theory would be spent by local authorities on improving tourism services. Opponents argue that Scotland is already expensive to visit and could turn away visitors and there are suspicions that levies won’t be ringfenced or used efficiently.

According to the World Economic Forum Travel and Tourism Competitiveness Index, the UK was ranked 140th out of 140 countries for tourism price competitiveness in 2019.

A consultation seeking views on restrictions to alcohol advertising and promotion in Scotland is open until March 9 and has been widely criticised for its potential to put Scottish distillers out of business.

If plans were to go ahead, it would make it increasingly difficult to advertise alcohol and would ban branded items or merchandise, when visiting distilleries. This could come as a severe blow to farmers who have started making alcohol in recent years.

The Scottish Farmer spoke with five agritourism businesses across the country, to hear how these changes and proposals could impact on their business and on the growth of the sector more widely.

Short Term Lets Licensing

David Smythe, of Cloag Farm Cottages, in Perth, is the Perthshire Destination Leader for Scottish Agritourism and farms 200 acres of cereals, and has three holiday cottages.

Since the Scottish Government announced that Short Term Lets Licenses would be introduced in October, he fears that a lack of rural proofing of policy could have dire consequences for rural businesses.

He argued that there isn’t a joined-up approach by local authorities in administering license fees and explained that he will be hit with a £1600 license for the next three years, where just over the county border in Stirling, he would be looking at £400 for the same three cottages.

“This scheme will only stifle growth in parts of rural Scotland, with some businesses unable to absorb these added costs and bearing in mind that many businesses are still recovering from Covid, battling with rising costs across the board and this is another hurdle to overcome,” he stressed.

“To compound matters, each local authority is charging different amounts and with different hoops to jump through. The future growth and viability of our rural businesses shouldn’t be put down to a post-code lottery.”

David suggested that a registration scheme would have been a much more sensible approach, similar to that in place for private rental tenancies and he said it would cover safety issues around basic fire and electricity checks, plus building standards, and for him would cost a fraction of the price, at £116.

“The whole issue with this policy is that it hasn’t been rural-proofed. There is no recognition of the fragility of our rural economy but also the multiplier affect we can bring to these communities, providing jobs and bringing in tourists to service the local area.”

Aside from the financial impact of the licensing scheme, he explained that it brings with it unnecessary administration, as well as delivering an insult to those established businesses like his.

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“It is an affront that after 32 years, I now have to prove I am a proper person running my business, not to mention the cost and time involved with preparing all the certificates that prove you have been maintaining or updating standards, to evidence it all to the local authority.

“The scheme is also having a harmful impact on the wellbeing of individuals working in the sector,” he continued. “The Association of Scotland’s Self Caterers has just run a course on mental health after it found that a lot of their members were suffering with poor mental health because of the threat this licensing scheme poses to their businesses.”

Planning Permission

Amy and Murray McConchie are fourth generation beef and sheep farmers from Gatehouse of Fleet, who offer on-farm accommodation in their holiday cottage and three shepherd huts.

With the future sustainability of the farm causing some concern, they put in a planning application to add a pod development on to their business to improve their financial viability. After a 32-week long wait, they were refused on the grounds that the local council did not want to greenlight a new cluster of development, which could detract from the natural beauty of the surrounding area.

“The individual working on our case kept putting our application to the bottom of the pile and delaying our plans, and ultimately the decision taken has come down to her opinion and concerns around how the development would look to visitors in the area.

“We were told we would only be granted planning permission for the other side of our farm which has no road access or services, so would require us to spend £50,000 to install power and would encroach on good agricultural land,” they explained.

“We had carefully thought through our plans for the pod development, bringing in ecologists to undertake a survey to ensure there wouldn’t be any disturbance to surrounding land or habitats and even paid for our own planning consultant to put together a report, which was submitted to the council.

“It is just so frustrating when others around us, including our family who run Laggan, are being given the go ahead to increase their number of pods, yet we seem to be penalised as our pods are deemed a new cluster, as opposed to an extension. These outdated views are stifling new growth and development and will prevent new entrants to agritourism trying to get a foothold.”

Amy and Murray added that the planning application process was an ‘expensive waste of time.’ “Three-quarters of a year, numerous surveys and reports later and we have spent £15,000, with nothing to show for it,” stressed the McConchies.

“There is rising demand from visitors who are now beginning to discover Dumfries and Galloway, so the fact we can’t cater for that demand is very frustrating. We know a local farmer in Wigtownshire who has applied for planning permission for a lodge, and a year and a half on, he has still had no response.

Commenting on the new National Planning Framework 4 legislation, Amy added: “There is not one mention in the whole document of farms or farming despite 80% of Scotland’s land being used for agricultural use. There is very little recognition that Scotland’s farmland is a huge untapped asset for rural economic growth in Scotland which if the planning system was aligned to, this potential could revolutionise the rural economy.”

Deposit Return Scheme

Rob and Emma Niven run Loch Leven’s Larder, an award-winning café and farm shop, alongside their 750ac arable farm.

A third of the farm is in vegetable production, with much of that produce being sold through the farm shop and restaurant. They employ 70 members of staff in the larder and two full-time on the farm. Recently, they entered a partnership with Kinross-shire Wooden Products, who upcycle furniture for offices, as part of their wider drive to reduce waste on the farm.

Rob Niven told The SF that although he is always keen to reduce waste and improve recycling efforts, the proposals for the bottle return scheme is simply shifting responsibility on to businesses, to deal with public waste.

“The 20p tax on bottles isn’t my biggest concern, it is the logistical nightmare it is going to create for businesses like ours, who will now have to reallocate or invest in additional resources to support the scheme,” he explained.

“The government is passing the buck to us to solve a problem that they haven’t been able to get on top of themselves, without any consultation with businesses or any clear details on what the scheme is going to look like, yet it is coming in less than six months.”

Rob pointed out that they track all the waste they produce as a business each month, but now will have to play a guessing game with the volume of public waste they are going to have to recycle.

“We may need to think about extra storage space and staff, appointing or training up an operational team to oversee returned items and to wash them, as well as buying a van to transport them to recycling hubs – we could be looking at £50,000 a year added costs,” he continued. “All this resource allocation at a time when rural businesses are coming back from the pandemic.

"It is undermining our ability to recover, let alone grow. Our rates have now returned to full value, electricity costs have never been higher, we have increased staff wages in line with inflation, yet we are unable to pass these added costs on to the consumers, as we don’t want to add to the cost-of-living crisis.

“All this pressure and now the government wants us to become a recycling centre so the public can dump their waste on behalf of someone else.”

He concluded by acknowledging there may be good intentions behind the scheme but argued that it lacks thorough research and consultation and stifles both recovery and growth in the agritourism sector, contrary to the government’s very own Agritourism Growth Strategy.

Local Visitor Levy Bill

Lindsay Robertson and Donald John, run a herd of Aberdeen-Angus, Highland cattle and a flock of North Country Cheviots and Texel crosses, on South Uist. They also run a herd of Shetland ponies, which were introduced to South Uist by David’s mum, in the 1970s.

Together, they launched Long Island Retreats, which offers visitors an opportunity to immerse themselves in the crofting way of life and they have plans to open a farm shop this year, which will run alongside their meat box delivery venture.

Lindsay, who is the Highlands Destination Leader for Scottish Agritourism, told The SF that margins were much tighter for island businesses, with farmers and visitors having to take into account added costs of transport and travel, which can make it difficult to compete with the mainland. She explained that any transient visitor levy would make it more expensive for tourists to visit and could end up turning away footfall and investment in rural island areas.

“We have an aspiration to breathe back life in to old ruins on the croft, to give people a more immersive experience, soaking up our unique cultural heritage, but this is all hanging in the balance, as we have to take in to account this potential added payment to be passed on to future visitors,” she explained, adding that this would be compounded by ongoing problems with the ferries, which she said was also putting some people off visiting the Outer Hebrides.

Lindsay pointed out that she isn’t completely against a levy, acknowledging that there can be merit in giving budget back to local areas to invest in tourism services. However, she wasn’t convinced by the current model.

“Visitors to our islands are already subject to the highest VAT rates and passenger duties in Europe, and this is another tax which makes us less competitive as an agritourism sector,” she continued.

“Visiting the islands is already more expensive as there are added travel costs and last year CalMac raised the fares for campervans, so people are now looking at other destinations. Agritourism businesses across the country are still in recovery mode after the pandemic and islands in particular, extra costs could be our downfall.

“I’m also not convinced that money taken from businesses here will be spent locally and instead risk being swallowed up into council’s wider agendas. I understand that council budgets are being cut across the board, but this move is penalising struggling businesses just as islands are going to look less appealing to cash-strapped visitors.”

Lindsay pointed out that the combination of a levy on businesses and uncertainty over the future viability of an ‘unreliable ferry service’ could knock the confidence of both crofters on the island and future visitors, stifling business growth in Scotland’s rural islands.

Proposed alcohol advertising ban

Beef and sheep farmer, Jenny McKerr, runs the Wee Farm Distillery, in South Lanarkshire, having diversified into the craft gin market five years ago. She produces four main gins and over 30 liqueurs, which are sold on-site in their farm shop and available online.

Jenny explained that 80% of all gin sales are direct from the farm, with visitors travelling from as far as the US to visit the farm, buy their Shorthorn Wagyu beef and sample their range of gins. If plans to impose a ban on alcohol advertising were to come to fruition, Jenny said the future of many rural businesses like hers would be under threat.

“Like many people, we went in to farming to produce good food but have had to pick up different skillsets and diversify our offering to remain viable and this recent proposal joins a long list of policies which seem to be attacking the diversified parts of rural businesses,” she said.

If a ban on alcohol marketing comes to pass, Jenny won’t be able to display her gins when visitors come to her shop, sell merchandise or advertise to customers on social media. “We are very responsible in the way we market our gins alongside our farming story, but these proposals would stop us from being able to share the provenance behind our products which is what makes them so unique.

“How do you reach new customers to grow your business if you can’t promote it? It is not an option for us to build up a following and a market for five years, to then have to stop promoting it.”

Jenny explained that when customers come for tastings, she would have to hide the gin from being on display, which she pointed out would change the experience for most people. “By banning the selling of merchandise, it also removes brand loyalty and reduces our ability to sell value added products.

“We should be shouting about our drinks industry as an employer and as an exporter. Our craft gins attract people to come to Scotland, tourists who enjoy our special attention to detail and fall in love with the stories behind our produce.

“It is mind blowing that such a proposal is even up for consideration, given the duties that the government makes from exporting alcohol and what a huge part of Scotland’s economy whisky is and the growing gin market.

“It is hugely frustrating that as farmers, we are being encouraged to diversify and safeguard our businesses, then the next minute, we are being pelted by policies that seem to attack both our recovery from the pandemic and future growth,” she concluded.