Loans aim to bridge gap for missing farm support

Most farmers will be eligible for the government loans. Picture: Stuart Cobley
Most farmers will be eligible for the government loans. Picture: Stuart Cobley
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Scottish farmers and crofters who have been waiting for their 2015 farm support payments were yesterday told by cabinet secretary Fergus Ewing that they could receive 80 per cent of their 2016 payments in November this year.

This loan, amounting to approximately £300 million, will come from government reserves and is aimed at putting cash into the rural economy at the earliest opportunity.

But if Ewing thought the plan would pacify his political opponents, he was mistaken. Peter Chapman for the Scottish Conservatives described the loan as an admission of failure surrounding the computer system which was specifically installed last year to deliver common agricultural payments. Chapman claimed its poor performance had left thousands of farmers dealing with the consequences of late payment.

READ MORE: Scottish farm payments row prompts £150m debt spike

And Scottish Liberal Democrat Mike Rumbles described as “nonsense” Ewing’s claim that the loan scheme was injecting £300m into Scotland’s rural economy, saying: “Farmers should already be receiving full payment anyway if the new system was working properly.

“His 80 per cent loan plan will be offered to all applicants but this still means that the average farm business will be over £6,000 out of pocket for goodness knows how long.”

However, the loan scheme received a more favourable reception from NFU Scotland who said it could benefit up to 17,000 farmers and crofters.

Union president Allan Bowie said: “Knowing that up to 80 per cent of the support package will be delivered in early November gives clarity and certainty to farm businesses.”

However, Bowie also reflected on the recent past where around about 500 farmers are still awaiting their cash for 2015. “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.”

Bowie, who was in Parliament to hear Ewing’s announcement, welcomed the commitment from those responsible for the flawed IT delivery systems that it would be sorted by next year.

Ewing also confirmed his aim that all outstanding support payments for the past year would be made by mid-October; this being a critical date in avoiding any financial penalties imposed by the EU.

The loan money will be available to most, but not all, farmers with exceptions being made for those where there are already complications surrounding their support payments.

Farmers will have to apply but the application will be a simple straightforward letter. In order to comply with EU regulations interest will be added to the loan but it will not be collected by the Scottish Government.

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