REFORM OF the CAP may see farmers losing money as the cost of borrowing and falls in subsidies take effect, reports the Daily Telegraph.

The paper reports that the total deduction could be almost 15% in the first year alone.

Jimmy McLean, head of agricultural services at the Royal Bank of Scotland, told the paper that a 3% reduction to fund a national reserve had already been agreed.

There would then be another reduction of 3% – rising to 7% by 2010 – taken away to fund environmental projects.

But he added there would be a further as yet undecided deduction to build up an EU reserve.

“Once you add all this up you are talking about 15%, possibly more, of the single farm payment that they are receiving now,” said Mr McLean.

The paper also reports on the large delay in receiving the subsidy once it has been applied for and the fact that many businesses will be financially stretched in the mean time.

Farmers will have to apply in May but they will have to wait until some point between December and the following June to get paid.

“It will come in one lump, possibly in December but more likely in February,” said Mr McLean. “That will cause a cash hiccup.”