Richard Lochhead’s statement to the Scottish Parliament will surely be regarded as the most important he has ever made as Cabinet Secretary for Rural Affairs.
His speech outlined in considerable detail exactly how the new Common Agricultural Policy will be implemented in Scotland from 2015 to 2020.
What he had to say won’t please everyone, but the general opinion seemed to be that he had done his best to , as he put it, “fit square pegs into round holes”.
As everyone knew it would be, the new CAP will be area-based, but significantly there will be three payment regions instead of the previously proposed two.
The most productive areas of Scotland the arable area, the temporary grass and the permanent grass will remain as originally proposed and attract a payment of between 200 to 230 euros per hectare.
The big difference now is that the rough grazing area (RGR) will be split in two in an attempt to recognise farming activity.
The existing Less Favoured Area classifications will be used to split the area with categories B, C, and D essentially 1m hectares comprising the best areas of the RGR attracting a payment of around 35 euros per hectare while the poorest 2m hectares , presently category A, will have a payment rate of 10 euros per hectare, with a top-up of a coupled sheep payment equivalent to around 25 euros per ewe.
Splitting the rough grazing area has been seen as vital to stop Scotland’s CAP budget haemorrhaging to unproductive areas in the north and the west.
The move could yet prove to be controversial, with Mr Lochhead insisting that there will be no appeal mechanism for those who think their land has been placed in the wrong category.
Very significantly the reference year for the new CAP will be 2013 and not 2015, thus forestalling any moves by landowners to take back as much land in-hand as possible for their 2015 claim in order to maximise entitlements to the new scheme.
Most controversially of all there will be a five-year transition period from the current historic scheme to the new area-based scheme.
Some farmers, particularly but not exclusively new entrants, had called for a one-step changeover starting in 2015, but this will not now happen.
The 2015 payment will for budgetary reasons not be the same as the 2014 payment but it will be based on the historic scheme.
The 2016 payment will likely be 80% historic and 20% area based, and from then on the payment will in stages become increasingly area based. This will ease the pressure on those who face the biggest downward redistribution.
New entrants will be catered for by immediately being given entitlements at the average regional payment for the area they farm in.
A national reserve of entitlements will be set up, with Mr Lochhead admitting that the original allocation of 3% of the CAP budget was likely to have to be “substantially bigger” to meet demand. “It is only right that this should be paid for by the entire industry,” he said, adding that the deduction in future years was unlikely to be as high.
If there was a “rabbit out of the hat” moment it came with Mr Lochhead announcing that £45 million had been found from Scottish Government sources to pay for a three-year Beef Improvement Scheme.
The details were likely to be announced at the Highland Show, when Quality Meat Scotland chairman Jim McLaren reports on the findings of his Beef 2020 Review Group.
This will be on top of the 8% of the budget already allocated to the beef calf coupled payment scheme.
The 5% of the budget made available at the last moment for sheep coupling has been hugely controversial, with industry figures seemingly quite unable to make up their minds as to whether this was even desirable.
Mr Lochhead has made the decision for them and there will be coupled payment but only in the lowest paid Category A rough grazing area. The details are yet to be worked out, according to officials, but it may well be that in order to reduce on-farm inspections the payment will be made on gimmers or ewe hoggs as they join the flock.
In his announcement at Holyrood Mr Lochhead repeatedly made the point that he was determined only to reward active farmers.
A new breed of slipper farmers would not be allowed to emerge he insisted.
Land without stock at an as yet unspecified minimum stocking rate would not attract payments, and neither would sporting estates.
“Claimants will be excluded unless they can prove they are genuine farm businesses.
“These measures will ensure there are no payments made on an area currently estimated at 600,000 acres.”
There would be new flexibilities to deal with a number of circumstances, but inevitably this would involve a degree of “rough justice in the rough grazing area”.
There would also be a top limit on payments to any one business set at a higher-than-expected 400,000 euros after labour costs.
This was, however, unlikely to be implemented until half way through the term of the new CAP.
There was some better news for those arable farmers likely to fall foul of the three crop rule. Mr Lochhead said: “We have identified an alternative approach based on winter cover that gives equally good environmental outcomes.”
Asked after making his statement if his package was actually deliverable Mr Lochhead said: “I have always insisted it is absolutely essential that it can be implemented on the ground.
“That is why I have said that there can be no appeal over the allocation between the two rough grazing regions.
“As far as the five year transition period goes I am confident that we can deliver payments to farmers on time. I know it is a challenge. We were promised a simple policy from Europe but unfortunately that is not we have.”
Most farmers simply want to know how much they will receive from the new Basic Payment Scheme.
However, even after the announcement that is hard to say.
Mr Lochhead admitted there was nothing he could do to stop redistribution of payments, and that there would be significant winners and losers in every category.
There were, however, some guidelines as to how the money would be allocated.
By 2019 there would be 531 euros in the budget, compared to 583m in 2011 (down 9.5%).
By 2019, when area payments are fully implemented:
* Cereal farmers will in total receive 19.9m euros less (-24%).
* General cropping farms 17.4m euros less (-21%).
* Specialist beef farms 12.9m euros less (-9.6%).
* Specialist sheep farms 18.5m euros more (+55%).
* LFA mixed cattle and sheep farms 6.7m euros more (+9%).
* Mixed farms 19.4m euros less (-22%).
* Dairy farms 16.1m euros less (-30%).
In regional terms the north-east and Dumfries and Galloway are the biggest losers, with reductions of 29.6m euros and 18.1m euros respectively.
In the Courier area, Fife faces a reduction of 5.7m euros, with Tayside (Angus, Perth and Kinross) reduced by 5.1m euros.