Farm payments begin – and bank offers help

Share this article
Have your say

After a pretty rotten summer and autumn, things brightened up yesterday for Scotland’s farming community with the first tranche of European support payments going out.

At the same time, a major bank announced it would operate a ground-breaking fee-free overdraft or interest-only loan facility.

The Scottish Government said that more than £300 million of single farm payments had been transferred to around 14,200 producers’ bank accounts yesterday, the first day payments were permitted by European regulations. Rural affairs secretary Richard Lochhead admitted that Scottish farmers had faced a challenging time this summer, coping with this year’s record rainfall and the difficult harvest.

“In the current economic climate, these support payments are vital for Scottish farmers, making the difference between profit and loss for many farm businesses,” he said. “So this year’s payments should be seen as clear evidence that this government is supporting Scotland’s farmers in tough economic times.”

Meanwhile the Royal Bank of Scotland announced a number of extra facilities including a fee-free temporary overdraft or interest-only loan for six months. The bank also revealed loan repayment support would be available through reduced repayments or capital repayment holidays.

Jimmy Mclean, head of agricultural services at RBS, said the bank was very much aware of cash flow issues after the difficult conditions throughout the summer and the heavy rain and flooding over recent weeks.

“We hope that these additional facilities may help ease the pressure on customers and enable them to manage their cash flow through the winter and into next year,” he said.

McLean also revealed the bank had already lent over £220m to the agriculture industry since August as part of the government’s Funding for Lending Scheme. Under the scheme, RBS offers interest rate cuts from 1 per cent up to 1.7 per cent, and abolishes arrangement fees on loans for SMEs through the scheme.

Reacting to the single farm payment pay-out, NFU Scotland president Nigel Miller said that getting so many payments out the door in the first week was commendable.

The union urged the Scottish Government to make every effort to complete its full payment run by the end of December

The union also welcomed the extra facilities announced by RBS as recognition by the bank of the exceptional problems faced by farming this past year.