The first nationally-funded farm support payments have now been authorised, Rural Affairs Secretary Richard Lochhead has announced.
The Scottish Government has earmarked more than £250 million from national funds to provide cash support while Common Agricultural Policy (CAP) claims are being processed.
In an update today, Mr Lochhead confirmed:
- National Less Favoured Area Support Scheme (LFASS) payments have now started, meaning almost 11,500 farming businesses in Scotland’s most remote and rural areas will receive around £55 million in the coming weeks
- More than 63 per cent of farmers and crofters have now had a first instalment of their EU CAP subsidy worth about 80 per cent of their basic and greening claim
- The Scottish Government is on track to provide in April up to £200 million of nationally-funded payments to any eligible farmer or crofter who has not received an EU Basic Payment instalment by the end of March. Letters will be going out shortly with more information about the national support that will be paid and the small print legal terms and conditions the Scottish Government needs to provide.
- The Single Application Form (SAF) online application window opened on March 15 as scheduled, and early feedback about system performance has so far been positive
- Scotland’s new £45 million Beef Efficiency Scheme is set to open for applications in April
- More than 100 young farmers and new entrants have been allocated start-up grants from the Scottish Rural Development Programme, worth a total of more than £5 million.
The Cabinet Secretary said:
“We are continuing to do all we can to make support payments to Scottish farmers and crofters as quickly as possible. Around 63 per cent of CAP claimants have now had a first instalment of EU support that is worth about 80 per cent of their basic and greening claim.
“We know that, given the tough market conditions and extreme weather that affected many in recent months, some farmers are facing cash flow issues which is why the Scottish Government is using national funds to ensure farmers and crofters will receive support totalling hundreds of millions of pounds over the coming weeks.
“We have begun authorising nationally-funded LFASS payments and will shortly write to farmers and crofters who’ve not yet received a basic and greening first instalment with more information about how national support will be paid, and the small print legal terms and conditions that we need to provide.
“I fully accept that the IT system is not enabling us to process claims as quickly as we want. We are continually working to improve that, and this year’s SAF window has opened as planned with positive feedback so far.”
Commenting specifically on the launch of the £45 million Beef Efficiency Scheme, Mr Lochhead said:
“Beef is the powerhouse of Scottish agriculture, and this is a massive investment that has the potential to revolutionise the sector. Collecting and monitoring key information about cattle, including genetic data, will enable farmers to implement changes to improve the management and quality of their herd.
“In return, producers will receive financial support equivalent to about £32 per calf and, more importantly, be ideally placed to reap huge rewards in the longer term – namely, improving the quality, efficiency and sustainability of Scotland’s beef herd, leading to higher profits and lower greenhouse gases.
“I urge all eligible breeders to apply for this unprecedented support when the scheme opens in April as I am keen to maximise the number of farmers who will benefit. We will be closely monitoring the number of applications later in the year to see if further action is needed to increase participation.”
Jim McLaren, Chairman of Quality Meat Scotland who also chaired the Beef 2020 industry working group, said:
“The scheme was developed on the back of the last beef price downturn, and as prices and margins again come under pressure, the BES is a great opportunity to examine aspects of our businesses which can be trickier to get a handle on. This is a unique chance for Scottish Beef calf producers to improve their business efficiency with the aid of some very welcome financial support from Scottish Government. I urge producers to look at the scheme from that perspective and utilise the crucial extra management information which will be available to them as participants.”
Chairman of NFU Scotland’s Livestock Committee, Charlie Adam, said:
“We are delighted that £45 million has been committed towards further improving the efficiency of the Scottish beef herd. As an industry, we have never stood still and I hope this scheme sets some strong foundations for us to keep getting better. We welcome Scottish Government’s commitment to fully explain the terms and conditions for the scheme before the application window opens in April. Over the next few weeks the industry is looking forward to finding out all the detail and obligations on the scheme and how it has the potential to transform their beef businesses.”
Director of Policy Jonnie Hall commented: “It’s no surprise that farm incomes had halved over the four years to 2014. It’s all about costs, markets and support. And for the vast majority of businesses across almost all sectors these three are conspiring to drag incomes down. Continually rising input costs, both cost of production and compliance, and low and often volatile market returns have prolonged the cost-price squeeze that Scottish agriculture has faced for a number of years.
“In years gone by, direct support payments went a long way in plugging that gap. However, the gap is widening while support is reducing – from a reduced Common Agricultural Policy budget and an unhelpful Euro exchange rate. This may yet be compounded further as the full extent of redistribution of CAP support reveals itself as we see the new area-based payments bed in.
“This undoubtedly suggests that support from now on has to be more targeted, to underpin active farming and crofting, while farm businesses, processors and retailers, and policy makers all need to focus on cutting costs and ensuring fairer margins throughout the entire supply chain.”
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