Scottish farmers will receive a £80m subsidy boost before the end of March 2020 as the first half of the convergence funding back payment is delivered.
The money is part of a £160m package from the UK government for failing to give Scotland the total amount of EU funding it was allocated between 2014 and 2020.
Scottish rural economy secretary Fergus Ewing has still not released full details of how the funding will be distributed, but has pledged it will support active farming, with a focus on farmers in the marginal uplands, hill farms and island areas.
Mr Ewing said the cash will result in all eligible farmers and crofters seeing either an increase or a significant increase in the money in their bank accounts.
However, he appeared to rule out delivering all the money through direct funding (EU Pillar 1), such as a higher per-hectare payment rate or larger headage subsidies, and signalled that some of it will be diverted into the Less Favoured Area Support Scheme (LFASS).
This top-up scheme for farmers in marginal areas had previously seen its funding slashed by the Scottish government.
NFU Scotland president Andrew McCornick said: “We cannot agree with the Scottish government’s proposition to use any of the £160m pot to address the budget shortfall that has been created in the Less Favoured Area Support Scheme in 2019 or 2020.
“To strip this money from the £160m to fill the hole in the LFASS budget is a missed opportunity and a blow to beleaguered Scottish farmers and crofters.”
He said the union preferred to see all of the money delivered through direct funding, with a priority on farmers in region 3 – the lowest-quality land category – which the EU funding had originally been intended for.