Union Calls for Immediate Reallocation of Deferred Funding Back to Scotland’s Farmers and Crofters

Letter to Deputy First Minister and Cabinet Secretary for Finance demands £61 million removed from agri budget is allocated through direct support top ups this financial year.

NFU Scotland is calling for an immediate reinstatement of £61 million to the Agriculture and Rural Economy (ARE) portfolio and that, instead of deferring these vital funds, Scottish Government allocate them in this financial year through Pillar 1 direct support payments. 

Last week, in a letter outlining 2023/24 in-year budget changes, Deputy First Minister and Cabinet Secretary for Finance Shona Robison MSP indicated her intention to cut the agricultural budget for a second consecutive year to address a significant shortfall in the wider Scottish budget. 

In the Scottish Government’s Emergency Budget Review in 2022, £33 million of funding awarded to Scotland as part of the 2019 Bew Review into the fair allocation of agricultural support in the UK was deferred. In June, NFU Scotland received a categorical assurance from the Deputy First Minister and Cabinet Secretary for Finance that the £33 million would be returned. 

Instead of that money being rightfully returned, NFU Scotland was angered to find that a further £28 million of uncommitted funding is to go the same way as detailed in the 2023/24 in-year budget changes set out to the Scottish Parliament’s Finance Committee last week. The Union had not been informed or consulted on the decision and, with £61 million of agricultural funding now removed in total, it raised its concerns in person when representatives met with Shona Robison MSP last week.

The Union is calling on the Scottish Government to use the £61 million funding as a supplement to the 2023 Basic Payments Scheme (BPS) and Greening. The BPS (£242 million) and Greening (£142 million) have a total envelope for 2023/24 of £384 million. The £61 million of uncommitted funding in this financial year would amount to almost 16 per cent of the BPS and Greening envelope.

It believes a one-off 16 per cent uplift in 2023 BPS and Greening payments would provide a significant cash injection to agricultural businesses across Scotland at a time when input costs are still putting them under extreme financial pressure and undermining business viability. That financial injection would drive economic activity throughout rural communities.

Writing to the Cabinet Secretary this week, President Martin Kennedy said: “Scotland’s farmers and crofters are angry and frustrated that, for the second consecutive year, vital funds have been deferred from the agricultural budget. These decisions were taken without any consultation or engagement with NFU Scotland or the wider agricultural industry. This action is all the more frustrating in the light of funding being unavailable for capital schemes such as the Food Processing, Marketing and Cooperation (FPMC) Scheme.

“In total, some £61 million of agricultural funding allocated to the Scottish Government by the UK Treasury has now been ‘withdrawn’. This funding was formally ringfenced by the UK Government for Scottish Government to spend on agricultural support and rural development.

“While we recognise there are many financial pressures for the Scottish Government to reconcile, there must also be recognition of the significant return on investment generated by the expenditure through the ARE portfolio – delivering high quality food production as the mainstay of our vital food and drinks sector, as well a host of environmentally and socially vital public goods.

“We have been informed by Scottish Government that this money must be spent in this financial year (2023/24). We are also told that this funding must be used as ‘resource’ rather than ‘capital.’  That being the case, we cannot accept losing it from both Scottish agriculture and Scotland Plc. Delivering it through BPS and Greening top ups will restore confidence in the budgetary process and is the right thing to do for Scotland’s farmers and crofters and the whole rural economy.” Ends

Contact Bob Carruth on 0131 472 4006.

Author: Bob Carruth

Date Published:

News Article No.: 69/23

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About The Author

Bob Carruth

A dairy farmer’s son, I joined NFU Scotland in 1999 after 13 years as an agricultural journalist. Following spells as a regional manager and policy lead on milk, livestock and animal health and welfare, I became Communications Director in 2008.

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