Looking for a Lifeline for LFASS
 
It is beyond doubt that the Less Favoured Areas Support Scheme (LFASS) is one of the most critical strands of support for Scottish agriculture.  ‘Lifeline’ payments under LFASS, to over 11,000 farms and crofts on a non-competitive annual basis, often hold the key to the viability of agricultural businesses and the livelihoods of those who actively work Scotland’s more disadvantaged and often most remote landscapes.  In doing so, LFASS underpins so much more – including the very fabric of many rural communities.
 
LFASS provides a vital injection of funding for hill farmers and crofters and without the annual £65 million of lifeline support to the most vulnerable areas of Scotland many hill farms and crofts would be unsustainable which could lead to much wider ramifications - including the potential for land abandonment.  
 
This is an unprecedented period of physical and financial challenge for Scotland’s farmers and crofters, imposing huge personal and business stress on many.  Amid an era of Brexit-fuelled uncertainty, a threat to the funding of LFASS would be a major blow to the confidence and continuity of many farming and crofting across Scotland’s LFA. As such, any cut to LFASS payments in would be wholly unacceptable to NFU Scotland.
 
Yet the funding under LFASS is under threat.  Budget pressures aside, complex EU rules that govern LFASS will require the Scottish Government to pay no more than 80 per cent of the average payment for the period of 2007-2013 in the first year of so-called ‘parachute’ payments in 2019.  Regulation EC 1305/2013 also states that the parachute payments should end at the latest in 2020 when no more than 20 per cent of the average payment should be paid.
 
An immediate and significant priority of NFU Scotland, and its LFA Committee in particular, is to explore options for protecting affected farmers and crofters through 2019 and 2020 and maintaining levels of support.  
 
NFU Scotland has continuously raised its concerns regarding the future of Scotland’s LFASS with EU Commissioner Phil Hogan and Cabinet Secretary Fergus Ewing to highlight the cliff edge faced by farmers and crofters in more fragile locations – highlighting that LFASS provides a vital injection of funding for hill farmers and crofters.
 
NFU Scotland has already entered into dialogue with Scottish Government, taking into account legislative, state aid and budgetary factors, to ensure any such cliff edge can be avoided.  Cabinet Secretary Fergus Ewing MSP met with NFU Scotland’s LFA Committee on 30 August in Grantown-on-Spey.  The Cabinet Secretary heard first hand of the challenges facing livestock producers in the LFAs, and that the potential threats of reduced LFASS payments.  The LFA Committee considered a number of possible options to mitigate against the LFASS parachute before meeting with the Cabinet Secretary, taking into account legislative, state aid and budgetary factors, to ensure any such cliff edge can be avoided.
 
At that meeting, NFU Scotland proposed seeking a derogation to the LFASS parachute requirement was raised - with Scottish Government agreeing that seeking a derogation may be the best option available.  Arguments for a derogation were: extreme weather; not being able to develop and deliver an Areas of Natural Constraint (ANCs) scheme; all LFA farms and crofts would otherwise see substantial reduction in support, and; in order to reduce the risk of land abandonment etc, i.e. the primary objectives of LFA support.
 
Further meetings have seen NFU Scotland and Scottish Government working together to build a case as to why the EC should grant either a derogation from the application of the parachute per se or a derogation from the requirement for parachute payments to be reduced from the average payment for the period 2007-2013.  The case will be built around the extreme challenges of the last 12 months (physical and financial), including significant stock losses, and that if LFASS payments were cut then it would threaten the explicit policy objectives of: allowing farmers and crofters to continue to operate as viable businesses; avoiding the risk of land abandonment; helping maintain the countryside by ensuring continued agricultural land use, and; maintaining and promoting sustainable farming systems.
 
Scottish Government has started to build the evidence base, with input from NFU Scotland including from members of the LFA Committee to illustrate the geographic spread and the nature of the real costs that might be experienced if LFASS payments were cut.
 
Finally, it is beyond doubt that NFU Scotland has and will continue to do everything it can to ensure the continuity of LFASS and its full funding.  This has been a major priority of NFU Scotland for some years, and it will continue to be top of your Union’s agenda.