Scottish farmers’ fears of another bleak winter spent waiting for EU funds were removed at a stroke yesterday when the Government committed to paying eligible producers 80% of their 2016 CAP support in November and the balance of their entitlement from early in 2017.
Around £300 million of basic, greening and young farmer entitlements will be paid in the form of an interest-free loan. Application letters will be sent to individual business by the end of September, and everyone who replies by the deadline of October 12 will receive a loan worth 80% of their entitlement in the first two weeks of November.
While the need to resort to loans and part-payments is an admission that Government still lacks complete confidence in the costly and controversial IT system installed specifically to administer EU funds, the guarantee removes massive uncertainty in the industry over essential rural support.
The loan guarantee, which was announced at Holyrood by Rural Economy Secretary Fergus Ewing, will mean that at least 17,000 farmers are paid most of their funds earlier than the usual date of late December. Mr Ewing said the new loan scheme would provide cash flow for normal business costs such as wages, feed and seed, fuel and fertiliser at a time of year when these bills often start landing on the doorstep.
The announcement was enthusiastically welcomed by farming leaders, although opposition MSPs instead berated Government and pointed out that around 500 Scottish farm business have yet to receive funds from their 2015 applications.
NFU Scotland (NFUS) president Allan Bowie said the announcement gave clarity and certainty to farm businesses and would have a positive impact on the whole rural economy.
He added: “The bitter legacy of the flawed 2015 payment run continues and the Cabinet Secretary again apologised for the problems, some of which still remain. On behalf of our members, we will continue to keep pressure on the Scottish Government until all outstanding payments for 2015 have been delivered.
“However, it is clear that the Cabinet Secretary has had commitments from those responsible for the flawed IT delivery systems that, by next year, IT functionality will be resolved and he has stated his intention of returning to the chamber in January 2017 to give a further update.”
North East MSP Mike Rumbles described Mr Ewing’s statement as “a dreadful admission of the failure of the Scottish Government”.
He added: “The Cabinet Secretary claims that through his loan scheme he is injecting £300 million into Scotland’s rural economy. However this is complete nonsense as farmers should already be receiving full payment anyway if the new system was working properly.”
