New SFP penalties could cost farmers thousands

New penalty rates being imposed on Scottish farmers for breaches of Single Farm Payment rules have been raised from 1% to 3% of the annual subsidy, and in at least one case represent fines totaling tens of thousands of pounds.

The new rates, branded “disproportionate” by NFU Scotland, were introduced this month by the Scottish Government following a critical EU audit of the penalty system across the UK as a whole. Farmers were only notified this month but the new penalty arrangements relate to the whole 2009 scheme year.

NFU Scotland president Jim McLaren stated that the fines were significantly out of line with the seriousness of the errors and called for a degree of proportionality to be factored in. He also advised farmers faced with such penalties to appeal the decision during the 30 day period from notification.

In one case currently being investigated by the union a livestock farmer had records for 6850 movements inspected and four errors – equivalent to 0.04% – were discovered. A 3% penalty worth £25,000 of his Single Farm Payment has now been imposed.

“This farmer has been going through hoops of fire and was using sophisticated electronic identification records but the 3% penalty kicks in at 0.01% of errors. That is over the top and heavy handed,” Mr McLaren said.

“When looking at errors, a farm’s size or the number of livestock in the business should be taken into account.

The penalty escalator means that if a farmer makes even one error in the following year the penalty rises to 9% of Single Farm Payment, to 15% in year three, 81% in year four and 100% in year five.

The president added: “In an attempt to find a more reasonable solution we have been looking into the European regulation and believe that there is scope for penalty rules to take proportionality into consideration. We have been sharing that information with the Scottish Government as we look to resolve the problem.”