On Tuesday, Scotland’s First Minister Nicola Sturgeon unveiled £200 million for farmers hit by delays to their farm payments. Ministers and farmers’ representatives have met several times since the beginning of the year to discuss the impacts the delays are having on farm businesses and those that rely on farmers’ custom.

Under the government’s scheme, any farmers and crofters who have not received a first instalment by the end of March will automatically receive a cash advance worth 80 per cent of their CAP claim - the government said this funding would be offset against farmers’ CAP payments.

At the beginning of the week, NFU Scotland claimed that just over £100 million of support under basic Common Agricultural Policy (CAP) schemes had been paid out from a total budget of almost £400 million. The union is blaming the government’s multi-million  pound spend on a flawed IT system for the delays.

According to the government, 10,164 first instalments had been paid by 7th March, worth about 80 per cent of basic and greening payments, and 56 per cent of eligible claims.

Speaking ahead of a meeting a meeting between the First Minister and NFU Scotland on Tuesday, NFUS President Allan Bowie said the union had warned the Scottish government about the IT system last summer, and pointed out that the government had already bypassed its system to make Less Favoured Area payments last week (more information here). He said, “At the Highland show… and when the First Minister met us on farm in late August, concerns about Scottish Government’s IT system and its ability to deliver the new CAP schemes were already being raised by the Union.

“Since then, Scottish Government has consistently missed its own deadlines on support payments and a gaping hole in the Scottish rural economy has emerged. That has brought business in the countryside to a standstill. Farmers may be recipients of support but that money very quickly leaves bank accounts to pay wages, invest in businesses and secure feed, seed, fertiliser and machinery.”

Making her announcement before the meeting, the First Minister said, “The transition to a new, more complex CAP that is affecting payment schedules right across Europe is happening as farmers and crofters are dealing with poor market prices and challenging weather conditions.

“We are less than half way 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.

“I very much recognise the cash flow issues facing Scottish agriculture, which underpins our £14 billion food and drink industry. That is why the Scottish Government has earmarked up to £200 million of national funds so that any farmer or crofter who has not received an instalment by the end of March receive a nationally-funded payment from the Scottish Government in April.”

Rural Affairs Secretary Richard Lochhead confirmed on Tuesday that Scottish Beef Scheme payments would be made in the middle of April, in line with previous years.

The Rural Affairs Minister said, “Europe’s deadline for making direct payments is June 30, and the majority of Scottish farmers and crofters have now received a first instalment worth about 80 per cent of their basic and greening claim.

“We are continuing efforts to speed up progress, such as taking on extra staff, but given the current difficulties facing Scottish agriculture the Scottish Government will use national funds to ensure farmers and crofters will receive support, totalling hundreds of millions of pounds, in the coming weeks.”