NFU Scotland has written to the Scottish Cabinet Secretary for Rural Affairs, Richard Lochhead on the need for contingency planning to account for the likely delays in agreeing new support arrangements for Scottish farming.

There is a realistic expectation that the timetable for CAP Reform, the development of a new main support scheme for Scotland and the creation of a new rural development programme to deliver Pillar Two support will slip.

According to NFUS, plans should be put in place now to account for such delays. It wants Scotland to provide a safety net for those new entrants currently excluded from support systems. It has also asked for crucial Pillar 2 schemes to be rolled over to help Scottish farming businesses ride out the most significant changes being introduced in the next CAP.

With the two major support schemes for Scottish agriculture, Single Farm Payment (SFP) and Less Favoured Areas Support Scheme (LFASS) due to change substantially and in choppy economic circumstances, NFUS fears that too much change too soon could seriously damage many Scottish farmers’ businesses.

Speaking at the Royal Highland Show, NFU Scotland President, Nigel Miller said:
"With negotiations stalling in Europe because of economic uncertainty, and the new CAP unlikely to be introduced before 2015, we are looking for the Scottish Government to help build some reassurance for Scotland’s agricultural industry.

"The level of change that many businesses now face because of delays is substantial. However, by ensuring a smooth move from the Single Farm Payment (SFP) to Area Based Payment (ABP) for current recipients and committing to a transition package for Pillar 2 schemes, in particular the Less Favoured Areas Support Scheme (LFASS), the impact of change can be managed.

"In addition, we would want to see development of a national reserve at the earliest opportunity so that those businesses – new farming entrants or those frozen out of existing support arrangements – do not have to wait another three years for the opportunity to operate on the same level as other businesses.
 
 "Equally, established businesses, some of whose support payments could reduce dramatically under the proposed ABP, require a smooth transition from the current CAP to the next so that they have enough time to adapt.

"The current EU proposals would see the move from SFP to ABP take place over five years, with much of the change taking place in the first year. A minimum transition period of eight to ten years, with a gradual adjustment - such as was applied in England and Germany - is necessary to ensure that the businesses that will be most dramatically affected can ride out the storm. Experience has shown that payment schemes can suffer drastic teething problems as well and we must be proactive in honest anticipation of this.

"In addition to both these elements, rolling over Pillar 2 in its current form could provide vital additional security to those businesses most at risk from the changes. To this end, bridging arrangements for the LFASS and Scotland Rural Development Programme (SRDP) are essential.

"LFASS plays a central role here, delivering £65 million annually to many of those businesses that are most likely to be affected by the new area-based system. They lie in our economically fragile areas and maintaining the current LFASS could help to anchor them until the new ABP system is firmly bedded in.

"The LFASS, which under the new CAP, will re-emerge as the Area of Natural Constraint Scheme, is under review and NFUS is already examining options for this in detail. Until we know the full impact of ABP, however, the stability that would be provided by rolling over LFASS in its current form would be invaluable.

"It is also crucial that there is no hiatus between the current SRDP, which ends next year, and the next; the delay in introducing the present programme meant that some schemes stopped altogether for 18 months, which cannot happen again.

"The Scottish Government has helpfully been pushing for a bridging mechanism for LFASS; NFUS believes this should apply to the entire SRDP as well."

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