Changes to support scheme could hit hard

IT MAY not actually be physically there in pound notes, but a claim was made this week that Scottish agriculture could be about to write off £1 billion through moving to an area-based support scheme.

The claim was made by Tom Stewart of rural consultants Hayes McFarlane, in their response to the Pack Inquiry into the future of farm support in Scotland.

The move to an area-based payment, would according to Stewart, remove the value of the Single Farm Payment (SFP) entitlement which he described as a financial cushion. This payment features as an item on every farmer's cash flow and it provides one of the certainties in forward budgeting.

Although it is only actually valued when it is bought or sold, Stewart maintained that it was effectively worth 1bn, or twice the annual SFP total cash.

The loss of this feelgood factor has not been mentioned in the many discussions on the Pack Inquiry so far and he believed this was a major oversight in the rush towards an area-based support system. "We should not underestimate the confidence that it gives to the industry."

Elsewhere, the Hayes McFarlane response is highly critical of any attempt to boost sheep production in the north-west of Scotland, as they claim history does not support the view that such sheep can meet market specification. Many of the ewes in that area were low-performing and produced lambs with low carcass weights, they said.

Hayes McFarlane also pointed out the much better market prices being received by producers now that the lamb market was more in balance.

They said: "Any significant change to the subsidy structure which encourages farmers just to keep numbers is actually trade distorting and cannot be to the benefit of current producers."

This did not mean the abandonment of such areas, as deer would effectively colonise such land as is currently used for sheep grazing.

Looking at the bigger picture, The consultants believe that the simplest and most effective way forward and one that would cause least disruption could lie in basing future payments on parishes.

This may seem unusual, but much of the basic information collected by government is still based on lands within the catchment area of the local church.

By basing future support on this basis, they believe that there would be no major swings in support.

The claim is that there is much more subtlety in their proposal as it reflects previous farming practice and land capacity when compared with the Macaulay Land Classification basis as proposed by Pack.

They freely admit that even within a small area such as a parish, there will be changes in production but these will be relatively minor compared with the major disruption predicted if the Macaulay base is used.

They strongly believe that entitlements should be able to be traded as this helps keep flexibility in the system; having no freedom to trade would, they claim, result in the industry being left in a time warp.