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Director of Policy and Member Services Blog - 30 August 2017

When it comes to facts on rural development budgets, it is important we cut through the politics writes Director of Policy and Member Services, Jonnie Hall.

An answer to a Scottish Parliament question has thrown up claims and counter-claims about perceived cuts to key elements of the Scottish Rural Development Programme.  Notably, this included the suggestion that the Less Favoured Areas Support Scheme was being cut to the tune of £40 million.

The so-called budget ‘cuts’ are, in fact, a re-alignment of what are always ‘indicative’ budgets, that are subject to variation depending on demand under different SRDP schemes and the Scottish Government’s overall spending priorities.

The £40 million LFASS ‘reduction’ to 2020, for example, is not a new cut but a reflection of the decision taken earlier this year by the Scottish Government to go for the ‘least worst’ option of an LFASS ‘parachute’ payment in 2018 of 80 per cent of payments made under LFASS 2017, rather than the significant upheaval and distribution of funding that would occur if Scotland introduced an Areas of Natural Constraint scheme in 2018. 

While working to this assumption, both NFU Scotland and the Scottish Government are seeking clarification from the European Commission that this step can be deferred until 2019.  If that’s the case, then it puts a totally different slant on things, as by that time the UK and Scotland will be beyond Brexit and the constraints of EU regulations – giving scope to re-think how we support agricultural systems in more disadvantaged areas.

That said, we have to be concerned that the ‘savings’ from the LFASS parachute payments option have not been passed on to other elements of the SRDP for LFA farmers and crofters to access.  The Agri-Environment Climate Scheme budget has been reduced too, apparently in line with a decline in demand.  NFU Scotland will continue to press for any underspend on LFASS to be made readily accessible to LFA farmers and crofters for meaningful and practical measures that enables them to take their businesses forward.

Other facts are required to help cut through the political claims.  Unlike coupled support schemes in Pillar 1 - the beef calf and ewe hogg schemes - the LFASS budget is not fixed.  So the spend each year depends on the number of businesses claiming and the forage areas they declare. 

A real concern of NFU Scotland in the scramble for Basic Payment Scheme entitlements established in 2015 was the potential shift of large areas of seasonal grazing going back in-hand and, as a consequence, neither the landowner nor the grazing tenant being in a position to use that land for an LFASS claim.  We’re currently exploring with Scottish Government how significant a decline there may have been in areas of land no longer being claimed under LFASS.

While the headlines might read of LFASS funding being cut, the reality is that LFASS was being forced into change by EU requirements that have resulted in the LFASS budget being re-aligned.  And LFASS and the rest of the SRDP is a dynamic programme whereby funding does shift laterally to reflect demand and priorities, but it is also constantly under pressure to help out with the Scottish Government’s overall spending plans.

Going forward, NFU Scotland will continue to focus on the design and delivery of the right policies for Scottish agriculture, with current funding levels maintained and ring-fenced, in order to target spending as effectively as possible on the active farmers and crofters that drive Scotland’s rapidly growing food and drinks sector, sustain Scotland’s rural economies and their communities, and safeguard and enhance Scotland’s fantastic landscapes and natural heritage.

Author: Jonnie Hall

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About The Author

Jonnie Hall

NFU Scotland’s Director of Policy Jonnie Hall has been involved with agricultural and rural policy for more than 30 years. He is a graduate of the University of Newcastle-upon-Tyne (BSc. Honours in Agricultural Economics and an M.Phil. in agricultural policy research) and Oxford University (MSc. in Agricultural Economics). Following an academic and consultancy career, Jonnie joined what was the Scottish Landowners’ Federation in January 1998, leading their policy work on agriculture and land use issues. Jonnie then joined NFU Scotland in May 2007, and has overall responsibility for the policy work of NFU Scotland as Director of Policy and Member Services. He has served on all key rural and agricultural policy stakeholder groups.

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