THE launch of a Scottish government hardship fund of £20 million offering loans to farmers still waiting for European Union (EU) subsidies has been criticised by MSPs as “an admission of failure” by ministers.
Rural affairs minister Richard Lochhead told the National farmers Union Scotland (NFUS) that a new scheme – backed by the £20m funding - would allow more farmers and crofters to get loans while waiting for the EU payments.
However, the union warned that the aid promised by Mr Lochhead at its conference in St Andrews would only help farmers hit by the delays if it was delivered quickly.
Mr Lochhead announced the package for the industry yesterday, as he came under pressure at the NFUS annual general meeting about a cash flow crisis facing farmers in Scotland.
Delays in the EU’s new basic payment scheme (BPS) mean that around 60 per cent of farmers and crofters in Scotland are still waiting for their payments to be made.
The scheme, which is part of the EU’s common agricultural policy (CAP), represents the main subsidy to farmers in Scotland and is administered by the Scottish Government.
The EU payments to farmers have been affected by major issues with the IT system used to administer them, while the Scottish Government has said the complexities of the CAP system had hindered the process.
Mr Lochhead told the NFUS that the £20mScottish Government funding would “ease cash flow pressure” on farmers.
He said: “We will work with NFUS, banks and others to finalise the detail of the scheme and ensure it is available as quickly as possible and simple to access.”
However, opposition MSPs accused the Scottish Government of failing to deliver the cash set aside by the EU for farmers and claimed a loans system was a poor substitute.
Scottish Liberal Democrat rural affairs spokesman Tavish Scott said: “This is a total admission of failure from the SNP government. Their approach to CAP payments is in utter chaos.
“Instead of distributing the payments farmers are all due and were promised so long ago, the benevolent cabinet secretary is offering a loan that will have to be repaid.
“Why should farmers take out a government loan when they should be receiving the government farm payment?”
Conservative MSP Alex Johnstone, a former dairy farmer from near Stonehaven, Aberdeenshire, echoed the criticism and demanded to know when the loans would be paid.
He said: “Ministers are now having to set aside £20m of taxpayers’ money to mop up their own failures to deliver this programme.
“It is a complete fiasco and rural Scotland has completely lost faith in this SNP government’s ability to deliver.
“Farmers who are fast running out of available funds to keep going need to know that this money is going to be available immediately.”
Scott Walker, chief executive of NFU Scotland, said the cash promised would only help the industry if it was paid quickly, as he suggested a failure to do so would continue to leave farmers short of funds.
Mr Walker added: “For this money to be effective it must be delivered quickly.
“We will be working with the Scottish Government on the details of this funding but it is imperative that it is put into place swiftly.”