The Scottish Government has begun making payments under its support scheme, after Less Favoured Area payments were subjected to serious delays.

On Wednesday (30th March), NFU Scotland announced that funds had begun arriving in hill farmers’ accounts from the government’s support pot of £55 million. The delays to LFA payments have been put down to a flawed IT system, and the government promised that £55 million – from a total budget of £65 million - would reach claimants in March.

Payments under the national LFA Support Scheme have bypassed the new IT system, and were instead based on payments made under LFASS in 2014 and area of land claimed in 2015.  It will see most claimants receive around 90 percent of funds due with a balance payment to be made later in the year.

Commenting on the payout, NFU Scotland’s Less Favoured Areas Committee Chair Martin Kennedy, who farms in Highland Perthshire, said, “Due to the ongoing problems with the IT system installed to deliver new CAP schemes, there was no prospect of LFASS payments being made until the Basic Payment scheme issues had been resolved.  

“Continued lobbying has resulted in the Scottish Government creating a national scheme to the value of £55 million and these funds are now being delivered. This lifeline payment will help to address the serious cash flow problems that not only our farmers and crofters are facing but also the supply industry who rely on us for business.”

Ahead of the establishment of the support scheme, farmers and representatives of ancillary businesses had met with government officials to explain the impacts of delayed farm payments on their businesses and the real economy.

In early March, first minister Nicola Sturgeon unveiled a £200 million advance for farmers, due to the huge delays to CAP payments delivered under the Basic Payment Scheme (the scheme is worth an estimated £400m to farmers). The support money for delayed direct payments is expected to begin hitting farmers’ bank accounts this month.

On Wednesday, NFUS’ Martin Kennedy continued, “It is inherent on the Scottish Government to work flat out to plug the huge holes in Scotland’s rural economy that have emerged as a result of a support delivery system that is not fit for purpose.”