The Scottish Government’s quest for a 13% coupling of the farm budget has been finally met by Defra.
The news comes in the wake of “complex negotiations” with the European Commission and months of discussion between the UK and Scottish Governments, which finally reached a head at Holyrood.
Following a meeting with Cabinet Secretary for Rural Affairs Richard Lochhead, Defra Secretary Owen Paterson announced: “Scotland does have the freedom to work up a scheme using 13% coupling.
“It’s now up to the Scottish Government to decide whether to resolve the problem of rough grazing areas via a coupled or area payment scheme,” he said.
He added: “Whichever option is decided upon, we agreed that the allocation would come entirely from the Scottish budget and that any legal or disallowance cost would be borne by them.”
The announcement follows the revelation last month the European Commission was prepared to rewrite the rules on regionalisation to allow part of the CAP to be administered at regional level and part at member state level.
Previously, under new CAP arrangements, the EU had set a coupled payment rate of 8% for each member state to help farms in fragile areas.
But the Scottish Government has long clung to the hope that it could gain a higher rate of 13% because England had not taken up its full allowance.
Higher coupled payments are seen as a lifeline for Scottish producers, and it has been widely anticipated that while the initial 8% will go to the beef sector the extra 5% will most likely be claimed by sheep producers.
When the news broke, NSA Scotland’s development officer, George Milne, was quick to stake a claim for all of the addition cash on behalf of Scotland’s sheep producers.
Speaking from Quixwood Farm, at Duns, during the launch of Scotsheep 2014, Mr Milne said all the additional 5% “must come to Scotland’s sheep farmers”.
“The administration costs would be so great that if any portion below the full 5% reached Scotland’s sheep producers it would not be worth the effort,” he said.
NFUS president Nigel Miller also met with Mr Paterson.
Mr Miller commented: “We welcome this very clear statement from the Secretary of State and the fact that he has clearly grasped the challenges we face in targeting support in our extensive Rough Grazing Region (RGR).
“The tools to target support at active producers within our RGRs are now within the grasp of the Scottish Government, and we would urge that the Cabinet Secretary takes full advantage to make most effective use of our limited Pillar One budget by underpinning production.
“This opens up the prospect of different approaches, and therefore time must be taken to explore the possible avenues.”
Delivery of funding in Scotland’s massive RGR an estimated three million hectares presents the greatest challenge due to the huge differences in land type and the intensity of farming in these hill and island areas, NFUS said.
However, adoption of the so-called ‘French’ redistribution model where enhanced payments are loaded on to the first 54 hectares included in a claim fails to recognise activity, the union added.
Mr Miller said that the Scottish Government must “start to distil its views” so that Scottish farmers can move on and plan.
“Designing systems simply to fit with a computer programme risks destabilising activity and runs the risk of opening the door to a new generation of slipper farming,” he said.
“In our opinion, it is a two-way choice: looking at remapping Scotland to recognise a greater number of regions, or using UK discretion to build in coupling options to recognise the most active farmers in our Rough Grazing Region.”
Mr Lochhead described his meeting with Mr Paterson as “helpful.”
“One of the biggest CAP reform decisions facing me is how best to support active farmers in Rough Grazing Regions, and I am currently having intense discussions with stakeholders about whether a third payment region or a higher rate of coupled support offers the best option.
“Clearly, if we are to use UK flexibility for a higher rate of coupled support, then the scheme will have to be designed so that it can only apply in Scotland.
“The scheme would have to be entirely funded from the Scottish CAP budget,” he added.