Concern grows over late farm payments in Scotland

Farm leaders in Scotland say they remain concerned that the Scottish government will fail to start making support payments in December and have called for a clearer steer on the likely timing.

NFU Scotland has met representatives of the major clearing banks to discuss the financial requirements of the agricultural sector over the coming weeks, amid fears that serious cashflow problems are looming.

Earlier this month the union said despite Scottish government statements to the contrary, it did not believe payments under the new Basic Payment Scheme would be delivered in the normal December window.

See also: Scottish farmers struggle with computer payments system

Two weeks on it was still of the opinion that this would be the case and the Scottish government should make a “a clear statement on when support payments will be made, and what value will be attached to those payments.”

The impact delays to support payments could have on the farming community was spelled out at the meeting at the union’s head office at Ingliston, Edinburgh, attended by representatives of Clydesdale Bank, Bank of Scotland, HSBC, Royal Bank of Scotland, TSB Bank and Santander.

Speaking afterwards NFU Scotland chief executive Scott Walker said: “Having already had conversations with the agricultural supply trade about delayed payments and cashflow problems this winter, it was important that we had that same conversation with our leading banking providers, and what arrangements need to be put into place to assist farming businesses.

“Banks have already told their customers that they are able to provide bridging loan provisions to cover the period from when direct payments were expected to arrive and when they will arrive.

“It is important that any farmer who thinks they may need to make use of this provision contacts their bank early.”

Mr Walker said it was important that farmers started to review their position now, rather than later.

“For those banks with a large number of farming customers, if all customers wait until December, the traditional time for payments to arrive, then the provisions may not be able to be put in place as quickly as some farmers may require,” he said.

A Scottish government spokesman said the administration was working hard to get payments to farmers before the end of the year.

“Our aim remains to begin payments before the end of the year if possible and once we are in a position to confirm the exact timescale we will do that. Many administrations across Europe are in a similar position to Scotland,” the spokesman told Farmers Weekly.

“The EU payment window runs from December to June and we have a good record in beginning payments at the start of that window. However, the new more complex CAP is radically different to the former policy and has required the introduction of new systems,” he said.

“We recognise and are sensitive to the cashflow issues facing the industry and we are working flat out to be able to begin making basic payments as soon as possible.

“[This year] was always going to be challenging with the biggest CAP reform in a generation to be implemented. During the CAP negotiations NFUS made clear that we had to get the policy decisions right even if that meant more complexity and an impact on timing in the first year,” the spokesman added.
The Scottish government said onerous inspection requirements had added to the complexity of administering the new CAP payment system.

“With more than 21,000 Single Application Forms to process and around 1,300 farms to inspect, what would have been helpful is flexibility on the inspection requirements for payments to be made in the normal payment window after 1 December.

“We will continue to press the EU Commission on this, although time is running out for this to be of any benefit,” the spokesman said.