Hill farmers and crofters are biggest payout winners

Farming bodies yesterday welcomed the news that the second tranche of convergence compensation will shortly be distributed to producers, but there were mixed views on how this is to be shared out.

And while the Scottish Crofting Federation (SCF) and the National Sheep Association (NSA) welcomed the decision to favour hill and island farmers and crofters, NFU Scotland said the funding path chosen generated “excessive and divisive” redistribution of the funds.

Making the announcement, Scotland’s rural economy secretary, Fergus Ewing said that around 18,000 farmers and crofters would benefit from the support worth £71.8m.

“This comes from a £160 million package the UK government agreed to pay to rectify a ‘historic wrong’ relating to EU Common Agricultural Policy funding that it failed to pass on to Scotland between 2014-2020.”

NFU Scotland President Andrew McCornick said that on one hand it was important that the Scottish government was set to fully make up the shortfall in payments under the Less Favoured Areas Support Scheme (LFASS), which had this year been restricted to 40 per cent of its 2018 value.

But he claimed that using the convergence funding to “bail out” the shortfall in LFASS “short changed” the whole of Scottish agriculture again - leaving some £33 million less for top ups to basic payments for all producers.

And he was also highly critical of the fact that the formula to be used to distribute the remaining £39 million meant little went to producers in region 1 - stating it was “very disappointing and ill-judged” that greater recognition had not been given to the value of Region 1 land across every farm and croft.

He said Scotland’s Region 1 land – whether prime arable or improved grassland – was the engine house of each business and sector.

“For Scottish agriculture as a whole, it’s the land that largely generated Scotland’s direct support budget and it’s the land that does the heavy lifting today.”

McCornick said that internal convergence from 2015 to 2019, which saw the creation of just three payment regions, had flattened direct support and already moved funding towards Regions 2 and 3.

“When added to the delivery method chosen by Scottish government for this convergence funding, it fails to recognise or appreciate the economic value of our Region 1 land proportionately compared to how the Scottish Agriculture budget was earned.”

Welcoming the announcement NSA Scotland’s president Jen Craig said the support was critical to survival in some of the most remote landscapes. “It comes at a timely period in relation to post-Brexit and Covid recoveries, both to which have had significant repercussions on the financial stability of our farming businesses.”

The SCF held that it was right and fair that the bulk of the money went to regions 2 and 3 as their low payments had triggered the additional funding.

*The rates will be: Region 1 - £9.65/ha; Region 2 - £17.97/ha; Region 3 - £9.69/ ha. The upland payment will be the difference between the 2020 and the 2018 LFASS payments.