Uncertainty over funding worries farm businesses

The absence of any firm funding commitments for the agriculture sector beyond 2022 is eroding confidence within farm businesses – many of which have to plan years ahead.

With market uncertainty continuing as the year draws to a close and the ending of funds coming through the Common Agricultural Policy – which had its budget set on a multi-annual basis – NFU Scotland has called on the UK Government to fulfil the manifesto commitments which it gave tosupport the industry.

“Under current and foreseeable market circumstances, such funding is critical to ensuring the sector continues to underpin Scotland’s high-quality food and drinks sectors, that are so important to the Scottish economy and post-Covid recovery, whilst also enabling farmers and crofters to deliver on environment and climate change ambitions,” said union president, Andrew McCornick.

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He said that while the UK Government’s Spending Review had confirmed that funding in 2020/21 would remain the same as that provided through the CAP in 2019, this fell short of previous pledges to commit funding on a multi-annual basis.

“There also remains an absence of any commitment from 2022/23 onwards that would uphold the recommendations of the Bew Review,” said McCornick.

But the Scottish Government didn’t get off Scot-free –and was called upon to ensure the full continuity of Pillar 2 funded schemes such as the Less Favoured Areas Support Scheme (LFASS) and the Agri-Environment Climate Scheme (AECS):

“In addition, NFU Scotland has also called on the Scottish Government to ramp up the spending under the Agricultural Transformation Programme, through the Sustainable Agricultural Capital Grant Scheme (SACGS).

“If the ambitions of the Scottish Government’s recently published Climate Change Plan are to be realised, then both the right measures and money are essential.”

Declaring himself “beyond frustrated” by the lack of commitments, McCornick added:

“NFU Scotland has always been crystal clear that in the post-Brexit era, Scottish farmers and crofters must have access to the same amount of funding as they had under the CAP as promised in the Conservative manifestos and that the sector should not be disadvantaged financially by Brexit.

“We need clear long-term commitments from Treasury to honour promises made for at least the remainder of the UK parliamentary term to 2025 and to uphold the recommendations of the Bew Review. The absence of such commitments will threaten the stability of Scottish farm businesses entering an uncharted period.

But he said that it wasn’t all about the money:

“It is just as much about how funding is used. As agriculture and related policy are devolved, that lies entirely within the gift of the Scottish Government. Assurances that the Scottish Government will continue to play its part in funding existing schemes would provide stability and continuity.

He also said commitments were required to initiate transformation – not least in the face of climate change challenges:

“Investment in Scottish agriculture now will deliver for a green recovery in the rural economy, the national economy, jobs, the environment, biodiversity, climate change and our national wellbeing post-Covid.”