MSPs hear supply trade carrying the can in cashflow crisis
Scottish farmers are calling on Scottish Government to immediately address the cashflow crisis in Scottish agriculture by delivering part payment to all claimants.
In the past week, only seven per cent of claimants to the new Common Agricultural Policy support scheme have received part-payment. That means since the payment run started in late December, the total percentage of Scottish claimants that have received part-payment is only 35 per cent. It is likely that significantly less than 35 per cent of the total pot of available funding has been distributed meaning that the cash crisis on farms is deepening.
NFU Scotland has repeatedly called for Scottish Government to recognise that its delivery system remains badly flawed and only immediate steps to deliver 90 per cent of payments to 90 per cent of recipients can avert a worsening crisis for the whole Scottish rural economy.
At an event hosted by Forth and Clyde Regional Chairman Tom French, at Balgray Farm, Crawfordjohn in South Lanarkshire today (Monday 8 February), the Union brought together farmers and representatives of key supply trades – agricultural machinery, feed and fertiliser – to quantify the impact that the late delivery of basic payments is having on other parts of the industry. The meeting was attended by Clydesdale MSP Aileen Campbell and MSP for the South of Scotland Claudia Beamish.
It was abundantly clear that many firms within the supply trade are currently supplying extended credit facilities to their customers and that, from conversations with their farmers, the worry and despair generated by the crisis was now having an impact on the health and well-being of some.
Host farmer Tom French commented: “I welcome our local MSPs meeting with us to hear about the severity of the current crisis and the impact that it is having – not just at farm level – but for the whole rural economy. Quite frankly, the wheels have stopped turning.
“We knew 2016 would be a difficult year as we changed to the new CAP regime but we now have the perfect storm of low commodity prices, poor weather and severe delay in getting support payments out to the industry.
“Every day is adding further costs but much of that burden is currently being carried by those businesses who supply us. Bills traditionally settled in December are going unpaid and orders are drying up.
“The message from today to Scottish Government was put your aversion to risk aside and do all you can to get the vast majority of payments out the door to the vast majority of businesses. Farmers are very poor at wealth generation but they are very good at wealth distribution and getting funds into farm bank accounts is absolutely essential if we are to get funds flowing again to the wider rural economy.”
NFU Scotland Vice President Andrew McCornick, who attended the meeting, said: “It was abundantly clear from the input of the farmers and the trade representatives here today that the human element is a growing concern. The worry and concern of those still to receive payments, and what that means for their family and their business has seen many now fulfilling the role of counselling and helping their fellow farmers through what are difficult times.
“Clear and concise communications remains vital to that process. We heard today that letters of entitlement issued by Scottish Government have been incomplete and only added to the confusion and several felt that the helpline provided had failed to deliver any clarity on individual circumstances.
“Too many Scottish farm businesses still have no idea what the true value of their support will be and when they are to receive their part payment.
“Heading into the second week of February, only 35 per cent of claimants have received some funding. The only way Scottish Government can properly address this crisis is to drop its aversion to risk, and deliver part-payment to all claimants in the next few weeks. If you can issue a letter of entitlement, you can issue part payment.
“Those who are robustly supporting their customers by continuing to provide credit or extending payment terms are providing a huge service to the farming community but they cannot be left to carry the can for Scottish Government failings in delivering support.
“And those around the table were abundantly clear on their concerns about the knock on effects that the delivery system failure may have – Less Favoured Area Support Scheme payments, new headage schemes, Rural Priorities funding and agri-environment claims must not be casualties of a failed delivery system and a statement on timings for these schemes is also long overdue.”
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