14 January 2000
Early retirement for Scots farmers?

By Shelley Wright

SCOTTISH farmers could soon be eligible for early retirement – even though such a scheme has previously been ruled out for farmers in the rest of the UK.

An early retirement scheme and grants to help young people start farming are being considered in Scotland, Farmers Weekly has learned.

Proposals are being examined after the Scottish Executive accepted that modulation of farm subsidies will be applied north of the border from next year.

Scottish farm minister Ross Finnie was initially opposed to the idea of cutting farmers direct payments and redirecting the money to rural development.

But a consultation document released this week makes it clear that there has been a change of heart.

“In recent weeks… it has been agreed that the UK government will match pound-for-pound any money generated through modulation,” the document states.

“This adds significantly to the funds available to Scotland, while maintaining a low level of modulation.”

Schemes affected by the cuts would be sheep annual premium, suckler cow premium, beef special premium, and arable aid.

The proposed modulation rates are the same as those announced in England before Christmas: 2.5% in 2001/02, rising to 4.5% by 2006/07.

A total of 97 million would be raised over six years from Scotlands farmers, and Treasury funding would result in a total budget of 194m for rural development.

Having decided that modulation will be introduced, the executive is now seeking views, by 21 February, on how the money should be spent.

Schemes for early retirement and new entrants are listed as two possible candidate ideas alongside other rural-related projects.

Under European Union rules, the early-retirement option would be available to farmers aged between 55 and 65 who have farmed for at least 10 years.

Land would have to be transferred to another farmer or to non-agricultural use, and payments of up to about 10,000 a year for up to 10 years could be available.

But, although asking for the industrys views, the executive questions how effective early retirement would be in helping make the industry more sustainable.

Aid for farmers under 40 could either be a single payment of up to 16,500, or a subsidy on loans taken out to cover the cost of setting up a farm business.

The executive outlines other projects that could be adopted, such as land improvement, diversification, environmental protection, and conservation.

The Scottish NFU, still opposed to the principle of modulation, is planning to consult its members on the various options in the coming month.