Government will bail out crisis-hit farmers with £200m taxpayers' cash

Nicola Sturgeon last night bowed to political pressure by pledging £200 million of taxpayers' money to bail out farmers facing a cash crisis caused by a Scottish Government computer blunder.




With angry farmers expected to protest outside Holyrood today, the First Minister said she would raid public funds to help farmers suffering from her government’s failure to distribute hundreds of millions of pounds of EU support.

Ms Sturgeon acted as the Scottish Government faced calls for an independent inquiry into the mishandling of millions of pounds worth of Common Agricultural Policy (CAP) subsidies which has brought many rural businesses to the brink of collapse.

Prominent farmers have called for the resignation of Rural Affairs Secretary 
Richard Lochhead.

Farmers have been let down by problems with a £178m computer system meant to distribute around £400m of EU support by the end of December. Last week, Mr Lochhead said he would bypass the system to pay out around £65m of Less Favoured Area Support Scheme (LFASS) to hill and sheep farmers, but £300m of Basic Payment Scheme payments are still outstanding. Last night, Ms Sturgeon announced the cash advance, which will help farmers while their claims are still being processed.

The First Minister said: “We are less than halfway through the payment window allowed by Europe, and the majority of Scottish producers, more than 10,000, have already received a subsidy payment. However, payments are not being made as quickly as we would like.”

She added: “That is why the Scottish Government has earmarked up to £200m of national funds so any farmer or crofter who has not received an instalment by the end of March receives a nationally funded payment from the Scottish Government in April.”

As of Monday this week, 10,164 first instalments of the cash, worth about 80 per cent of LFASS payments, had been made.

That equates to about 56 per cent of eligible claims.

The government pledge means any farmers and crofters who have not yet received a first instalment by the end of March will automatically receive a cash advance worth 80 per cent of their CAP claim. Support would be offset against the claimant’s CAP payment.

Today, the Scottish Conservatives at Holyrood will claim farmers have lost confidence in Mr Lochhead.

An NFU Scotland rally is scheduled to take place outside Holyrood as the crisis is debated inside.

Tory rural affairs spokesman Alex Fergusson said: “It was first warned two years ago that this IT system was not fit for purpose, and that has proved to be the case.

“An extra £200m fund will not address that issue, and that is why we still need a full, independent inquiry into this.”