£200m emergency funds will '˜break cash log jam'

A stop-gap safety-net payment '“ backed by £200 million of Scottish Government funds '“ will see farmers and crofters who have not received their farm support allocation by the end of March receive a cash advance, a move NFU Scotand president Allan Bowie said would 'break the log jam' over the rural financial crisis.

NFU Scotland president Allan Bowie welcomed the plan

That was the announcement made last night as NFUS leaders met First Minister Nicola Sturgeon and rural affairs cabinet secretary Richard Lochhead to discuss the financial crisis in the countryside.

Sturgeon said that her government fully recognised the cash flow issues facing the farming industry which underpinned the country’s £14 billion food and drink industry.

She added: “That is why the Scottish Government has earmarked up to £200m so that any farmer or crofter who has not received an instalment by the end of March will receive a nationally-funded payment from the Scottish Government in April.”

Under the deal – which will effectively be a national loan made to individuals until claims have been fully checked and processed in accordance with EU rules – individual farm businesses are expected to receive 80 per cent of their dues. A spokeswoman said that the rural payments department would write to producers who had not received their funds by the end of the month.

“Under the scheme any farmers and crofters who have not yet received a first instalment by the end of March will automatically receive a cash advance worth 80 per cent of their CAP claim. Support under this scheme would be offset against the claimant’s CAP payment,” she said.

Under the scheme farmers and crofters who submitted a basic, greening or less favoured areas (LFASS) application in 2015 will be sent a letter explaining what the Scottish Government plans to do and what it means for producers. “There is no need for them to apply but they should read the terms and conditions in the letter carefully when it arrives,” said the spokeswoman.

Bowie said: “The log jam has broken. For months, NFU Scotland has been looking for focused thinking and clear leadership from Scottish Government to resolve this farm payments crisis for the benefit of the whole rural economy.

“We welcome the First Minister’s involvement and intervention and finally we have clear timelines drawn when all basic payment scheme claimants will receive the majority of their claims; when hill farmers and crofters will receive the majority of their LFASS money and beef payments have been promised in mid-April.”

“That meets many of the demands NFU Scotland raised as a direct result of the cash flow crisis that has emerged in recent months.”

Bowie said that while the flawed IT system still had to be investigated – not least because the 2016 scheme opens for electronic applications in a few days’ time – at the moment efforts should be focused on getting support money circulating in the rural economy.