Response to Common Agriculture Policy announcement

The Scottish Government has announced its Common Agricultural Policy (CAP) which will reduce the amount of money paid to farmers in direct farm payments. The new system which will be introduced from 2015 to 2019 has been driven by the EU and means that only genuinely active farmers are entitled to direct payments although there will be support for new entrants to the industry.

Cllr Colin Smyth, Chair of the Council’ s Economy, Environment and Infrastructure Committee had written to the Rural Affairs Secretary Richard Lochhead in advance of the announcement to point out the importance of a transition period, where high level reductions to funding are made toward the end of the 5 year period.

The NFUS has also been lobbying the Scottish Government to ensure that our region which has a heavy reliance on both its agriculture and food & drink sectors could cope with the new rules. This and other lobbying seems to have been successful as the full reduction for farmers will not come in until 2019, giving our region’s agricultural industry time to prepare. Another positive point is that when the full reduction comes in during 2019 it will be for €18m per annum rather than the expected €22m.

The CAP reform was set to have serious impact on our region’s beef producers, however 45 million in additional funds will be available nationally for an ambitious beef improvement scheme. This package will complement the eight per cent coupled support for beef available under Pillar 1 and should hopefully safeguard and grow this crucial sector.

Cllr Colin Smyth, Chair of the Council’ s Economy, Environment and Infrastructure Committee said
“This was always going to be a difficult pill to swallow for our region’s farmers, but through lobbying, the Scottish Government has realised that reducing large payments to farmers in the initial years would have been catastrophic for Scotland’s Agriculture and the Food and Drink industry.

The announcement means that businesses have more time to prepare for large payment reductions and can bid successfully for additional support. Ultimately there will still be a reduction of income to our region at a time when the local economy has a long way to go to recover. However, these measures will at least delay the worst of the cuts and give businesses who are affected some time to restructure and prepare themselves. ”

NFUS Regional Chairman for Dumfries and Galloway, Andrew McCornick said
“I am cautiously pleased that most of the key issues that NFUS and our allies, like Dumfries and Galloway Council, had been lobbying for have been recognised in the Cabinet Secretary’s statement.

The gradual change from a historic to an area based payment system will allow farmers in the region the breathing space to adapt their businesses and preserve jobs whilst new entrants and developing businesses will get proper support from the start.

The beef sector, which is facing real challenges from the move to an area based payment, will receive enhanced support through the beef calf scheme with additional help via the Scottish Rural Development Programme with a beef improvement scheme to drive efficiencies into the industry over the first three years of this new CAP Reform.

The creation of three agricultural payment regions by dividing the rough grazing into two with the very poorest land getting a sheep coupled payment to top up a modest area payment, will drive the limited budget to target activity and the retention of rural employment

The recognition that salaries of employees are taken into account before any capping to individual businesses will protect jobs.

All these factors will help to soften the impact of the reform package in Dumfries and Galloway though my caution is being driven by the need to see details of how all this will be implemented and to ensure it is deliverable.”