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Farming hardship scheme

Published: 12 Feb 2016 10:50

£20m Scottish Government backing to ease cash flow concerns.

The Scottish Government is taking further action to ease cash flow issues in Scottish agriculture.

Rural Affairs Secretary Richard Lochhead has announced a scheme – backed by £20 million Scottish Government funding - to enable more farmers and crofters to access loans whilst waiting for their Common Agricultural Policy (CAP) payments.

Speaking at the National Farmers Union of Scotland (NFUS) annual conference in St Andrews, Mr Lochhead confirmed that more than 7,300 payments have now been authorised, which equates to about 40 per cent of the 18,000 or so eligible claims.

He also stressed that the Scottish Government is continuing to do everything in its power make payments as soon as possible against the challenge of implementing hugely difficult CAP reforms.

The Rural Affairs Secretary said:

"I fully recognise the cash flow issues facing Scottish agriculture as a result of difficult market and weather conditions coinciding with the biggest CAP reform ever.

"The Scottish Government continues to do everything in our power to get first instalments out to as many people as we can by the end of March and the balance of payments as soon as possible after that.

"We are making progress. However the extreme complexity of the policy we agreed with industry in Scotland – which is being delivered by a brand new IT system that we are constantly working to improve - means it is taking longer than expected to process applications – and I am aware that as a result some farmers and crofters are facing hardship.

"That is why the Scottish Government is taking further action to ease cash flow pressures in the sector by earmarking up to £20 million to ensure those most in need can access the credit they require until their payments come through.

"We will work with NFUS, banks and others to finalise the detail of the scheme and ensure it is available as quickly as possible and simple to access."

Notes to editors

EU rules expressly prohibit paying out on claims during the December 1 to June 30 payment window until they have been fully processed.

In response to industry demands, Scotland is replacing the previous two Scotland-wide direct income support schemes with six regionalised schemes in the same year we are having to move to a whole new system where payments are based on land area rather than historic production levels and implement greening. This is in addition to administering the dozen or so funding schemes in the new rural development programme which, for the first time ever, has been reformed in tandem with the direct payments system.

The Scottish Government has already deployed additional staff to area offices and moved to processing applications seven days a week, as well as setting up a customer helpline on 0300 300 2222.