The basic payment scheme (BPS) has replaced the single farm payment under reforms of the EU’s common agricultural policy, and concerns have been raised that payments due in December may arrive late.
Roddy McLean, director of agriculture at RBS, said: “We’ve been working closely with industry bodies who have warned that farmers could face a delay in receiving their BPS payment compared to when they have historically received their single farm payment.
“The payment window is from 1 December to 30 June, and while many usually receive payment at the beginning of the window, customers in theory could receive their payment six months later than expected.”
He added: “Our current expectation is the delay will not be this long but it is prudent for businesses to plan for possibly a two- to three-month delay.
“We know that many farmers are dependent on this money and will be hit hard by any delays as in many cases they have set up payments to coincide with receiving their support payment early in the payment window.”
The RBS bridging loan, available to existing customers, will allow farming businesses to borrow a “significant” proportion of the amount they expect to receive from the BPS until the official payment comes through.
Scott Walker, chief executive of the National Farmers’ Union Scotland, said: “Scottish farmers have benefited for many years from the Scottish Government’s good track record of paying the majority of farmers their single farm payment in December. With a new support scheme there is a fear that payments may be delayed this year. Should payments be delayed most farm businesses will face serious cash flow challenges.
“We’re pleased that RBS is to offer a loan to bridge the gap until payments are received. By working with the financial industry to ensure that they aware of the issues that farmers may face we are pleased that an industry solution has been found.
“However, it remains important that government does everything possible to ensure that this year’s single farm payment is received by the majority of farmers in December as has been the case in the past.”