Scots to escape support cuts?

11 September 2001

Scots to escape support cuts?

By Shelley Wright, Scotland correspondent

FARMERS in Scotlands less-favoured areas could escape planned cuts of 2.1 million to their support payments next year if rural development minister Ross Finnie succeeds in negotiations with the EU Commission.

Mr Finnie wants the commission to agree that the safety net, introduced this year to cushion farmers from dramatic losses in the transition from headage to area-based payments, should be maintained at 90% for 2002.

When Scotlands new Less-Favoured Areas Support Scheme was approved by the EU last year the plan was to cut the safety net from 90% this year to 80% in 2002, and 50% the year after.

But Mr Finnie is determined to press for the 90% to be retained next year because of the financial impact of foot-and-mouth disease on the countrys farmers.

“I will argue very hard for the higher level. Although success cannot be guaranteed, I am prepared to increase the budget to fund it.” Mr Finnie said.

If the 90% safety net is retained, the published budget of 58 million for the scheme next year will be 2.1 million adrift. Mr Finnie promised that the Scottish Executive would cover the shortfall.

He is also seeking permission from the commission to allow some refinements to be made to the scheme.

Analysis of the payments made this year has shown that 64% of Scotlands farmers were worse off under the new system than the old Hill Livestock Compensatory Allowance Scheme.

The main losers were those on more intensively stocked farms in the south and east of the country and in the islands of Orkney and Shetland.

To redress this, Mr Finnie wants EU approval to increase the minimal stocking density requirements on all farms.

That will cut about 2 million in payment, mainly to the very expensive, lightly stocked moorland.

“That money will then be recycled to increase the payments for improved grassland, helping the more actively managed farms and crofts.

“It will also offset the move by some to maximise the land they own as a way of maximising the payments,” Mr Finnie said.

The change should cut to 50% the number worse off under the new scheme.

The analysis reveals that, because of the safety net, the average loss this year under the new scheme was 65/farm compared with HLCAs.

One farm, however, was more than 10,000 worse off.

At the other end of the scale, about 60 of the total 13,500 claimants gained more than 10,000 each was the biggest individual winner securing about 40,000

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