Farm support payment talks get under way

Bank of Scotland's Sandy Hay said farmers suffering cashflow problems should contact their own bank. Picture: Alan Richardson

Discussions with the banking industry aimed at formulating plans to utilise the Scottish Government's promised £20 million loan backing for farmers suffering from the slow payment of farm support got under way yesterday.

Speaking at the Stirling bull sales, the Bank of Scotland’s joint head of agriculture, Sandy Hay, said that he had spent an hour in discussion with chief agricultural officer David Barnes and other department officials on the issue yesterday morning, with further talks billed to take place mid-week.

He said that while the announcement of the proposed scheme had taken the banking industry somewhat by surprise, keeping it simple to operate would be key to initiative’s success.

Hay said that the first step for anyone suffering cash flow problems was to contact their own bank at the first opportunity to discuss the best way forward as the banks themselves had set aside considerable reserves to tide the industry through any shortfall.

Andrew Naylor, head of agriculture with Bank of Scotland parent Lloyds Banking Group, said that the company had set aside an additional £500m for lending to the farming industry across the whole of the UK in the expectation that the new Common Agricultural Policy would test the normal windows for support payment.

However, with around £120m in extra loans approved across the UK to date, Hay said he was unaware of any farming business who had had an application for additional lending to tide them over until support payments arrived turned down by the bank.

“It might be that the complicated cases suffering hardship haven’t yet approached their banks, but even in the absence of a detailed official indication of how much they might be due in support banks generally have records of previous payments and an idea of the business’s track record on loan repayments to work on.”

• While commending the helpful attitude of the banks, Scottish Conservative leader Ruth Davidson said that the farming industry needed a clear indication from the Scottish Government of when payments would be made in order to let the industry return to a degree of normality.

She also struck out at the spiralling cost of IT and other measures spent by the administration on implementing the new CAP. She said that, at £180m, the cost of the new system was now coming close to half that of building the Scottish Parliament, a figure which had attracted much criticism at the time.