Fergus Ewing says farm loan payments should ease strain

The first of the less favoured area support scheme (LFASS) loan payments should start arriving in the bank accounts of hill farmers and crofters next week, easing the seasonal financial strain felt on many of these units in the wake of the demands of lambing and calving time.

The demands of lambing put a strain on many farmers' finances. Picture: Alan Wilson

The Scottish Government said that more than 7,400 payments worth over £45 million had now been processed and that further payments were likely to follow. The loans will be automatically deducted from EU payments once LFASS 2016 applications had been fully processed.

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Announcing the news, rural economy secretary Fergus Ewing said that he understood how important these payments were to the industry and to the wider rural economy.

“This scheme will pump millions into the rural economy at an important time enabling farmers and crofters to get on with purchases and investments for the crucial summer and autumn months,” he said.

Ewing stressed that the farmers had to opt in to the loan scheme this year – but added that those who had yet to return their forms could still do so and would be granted the loan as soon as possible.

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NFU Scotland vice-president Martin Kennedy, who farms in Highland Perthshire, said that it was good news that payments had commenced, adding: “That gets a huge chunk of the £65.5m LFASS budget into the rural economy and filtering down to the many businesses that service our sector. NFU Scotland called for this LFASS loan at the end of March, and it’s now being delivered.”

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Kennedy said that although the weather had been kind this year, leading to good lambing and calving for most, this time of year was always the most challenging financially for producers in disadvantaged areas.

“There are lots of costs and bills to settle at a time when little or no revenue is coming in and that severely tests the cash flow of even the most prudent farmer or crofter. It’s the timing of this LFASS cash injection that makes it of real value, rather than the sums involved.”

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Kennedy said with an IT payment system that was “not yet fit for purpose”, the union’s call for the loan scheme had been timely and necessary.

“Given the importance of LFASS support to hill farmers and crofters, we will continue to push Scottish Government for clear timelines on delivery in the future so that these businesses can plan ahead”.

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