Scottish Government urged to address the deepening cash crisis

NFU Scotland is to meet with Scotland’s First Minister Nicola Sturgeon tomorrow evening (Tuesday 8 March) ahead of a rally of farmers and crofters to be held at the Scottish Parliament in Edinburgh on Thursday 10 March.

The rally will highlight to Scotland’s politicians the deepening cash crisis in Scotland’s countryside. With prices for virtually every farm commodity on the floor and having endured the wettest winter on record, Scottish farmers and crofters want all Scottish MSPs ahead of the May election to understand that the farming industry’s position as the cornerstone of the whole rural community is under threat.

The key driver behind the current crash crisis is Scottish Government’s failure to deliver support payments to farmers and crofters because of its £178 million investment in a flawed IT delivery system that is not fit for purpose. To date, just over £100 million of support under basic Common Agricultural Policy (CAP) schemes has been paid out from a total budget of almost £400 million.  

That has contributed to a cash flow crisis on farm that has ramifications for the many hundreds of Scottish businesses who have farmers and crofters as their main customer.

NFU Scotland President Allan Bowie said: “We welcome the opportunity to meet with the First Minister and continue a dialogue about the importance of Scottish farming that started at the Highland Show. At that time, and when the First Minister met us on farm in late August, concerns about Scottish Government’s IT system and its ability to deliver the new CAP schemes were already being raised by the Union.

“Since then, Scottish Government has consistently missed its own deadlines on support payments and a gaping hole in the Scottish rural economy has emerged.

“That has brought business in the countryside to a standstill. Farmers may be recipients of support but that money very quickly leaves bank accounts to pay wages, invest in businesses and secure the feed, seed, fertiliser and machinery needed to ensure Scotland continues to grow and rear the raw materials for our food and drink sector.

“The £300 million funding gap in the rural economy means that banks and the supply trade are currently providing the credit facilities to the majority of farm businesses.  That is unacceptable, particularly when the mess is of Scottish Government’s creation.  

“With the Scottish parliament closing down on 24 March ahead of the Scottish elections in May, Scottish Government has a short window in which to turn this disastrous situation around.  

“We want our Cabinet Secretary Richard Lochhead to finish what he started and deliver payments to farmers now.  If that requires intervention by the First Minister to deliver then she would have the agricultural communities backing.

“Last week, Scottish Government bypassed the flawed IT system to roll out LFASS payments to vulnerable hill farmers and crofters.  Now they need to do the same for the basic payment scheme.  

“With half of farmers still to be paid and three quarters of the money still to be paid out now is the time to ditch the flawed IT system and deliver much needed cash flow to rural businesses.  We must not be left to take the burden of what has been a badly implemented and costly IT system.”

Notes to Editors

• The Futures Programme - an IT enabled change programme installed to implement CAP reforms in Scotland at a cost of £178 million (78 percent over budget) - has failed to deliver payments to farmers and crofters in line with the timetable set out by the Scottish Government. 
• NFU Scotland is concerned that these delays will continue throughout this year and that the poor performance of the system will again impact on farmers and crofters who are expected to start submitting their 2016 Single Application Form (SAF) in a few short weeks.
• In a briefing to MSPs last week, NFU Scotland laid out its requirements
  • Scottish Government to speed up the processing of outstanding basic payment and greening payments. Payments outstanding are estimated to be worth around £300 million.  They must hire temporary staff now to process claims quicker.  Failure to deliver will result in a fine levied on the Scottish Government by the European Commission.
  • Additional staff are needed to remove the obstacles that will allow the Scottish Beef Scheme payments valued at £38 million to be delivered now, delivering essential liquidity to a number of Scotland’s farm businesses.
  • The retention period for the sheep coupled scheme ends on 31 March.  Sheep coupled payments, valued at £6 million, must be delivered to farmers in the first week of April.
  • An independent inquiry must be carried out into the problems Scotland has encountered in delivering agricultural support payments this year, to ascertain why the system has failed and to ensure the same situation does not happen again in future years.
• In light of the ongoing crisis in the rural economy and Scottish Government’s failure to deliver support payments due to its flawed £180 million IT system, NFU Scotland is asking farmers and crofters to rally at the Scottish Parliament on Thursday 10 March.  The cash flow problems go far wider than just farm businesses and the Union is inviting representatives of other trades to join them. Those attending are asked to gather at the Scottish Parliament at 11am.
• If MSPs would like to meet with farmer representatives from their constituency or list area please contact Clare Slipper on clare.slipper@nfus.org.uk 
• Likewise, if members are attending the event would like NFU Scotland to request a meeting with their MSP then let Clare know.
• If members of the press would like to attend the rally please contact media@nfus.org.uk
• A copy of NFU Scotland’s briefing to MSPs is available from media@nfus.org.uk

Ends

Contact Bob Carruth on 0131 472 4006