Union Rejects Funds Transfer Proposal

Calls to protect Scotland’s food and drink ambitions

NFU Scotland has rejected proposals from the Scottish Government to transfer money between different pillars of Scotland’s rural funding, as allowed under the new Common Agricultural Policy (CAP).

Under new CAP rules, ‘modulation’ will no longer exist, but will be replaced by ‘flexibility between Pillars’, whereby the Scottish Government can transfer up to 15 percent of its Pillar 1 (direct support) ceiling across to Pillar 2 (rural development).  Scotland must notify the European Commission of its decision by 31 December 2013.

In responding to recent the Scottish Government consultation, which proposed transferring 9.5 percent of Pillar 1 funds to Pillar 2, NFU Scotland has said that this will harm our aspirations to build our food and drink sectors and could undermine primary production on Scottish farms at a time when many sectors are vulnerable.

The Scottish Government’s proposal of a 9.5 percent transfer follows a disappointing budget settlement for Scotland’s direct support funds, and any further cuts to Pillar 1 support will be very challenging for Scottish farming businesses.

Commenting on the NFUS response, Director of Policy Jonnie Hall said:

“The poor budget settlement and failure of Defra to recognise Europe’s wishes on convergence leaves Scottish producers facing uncompetitive area support levels which have the potential to trigger further production losses.

“The message to the Scottish Government is that food and drink policy, and the ambitious targets we have set for home production and exports, are key to rural and wider economy.  In an environment where budgets are falling and real cuts in direct support are inevitable, the Scottish Government must prioritise economic sustainability.

“That means that it must have the courage to take tough decisions to protect agricultural outputs and shelter already low direct support levels from further erosion.

“They can do that safe in the knowledge that retaining as much of Scotland’s limited Pillar 1 budget for active producers across all land types will also deliver on rural development goals - prosperous local economies, flourishing environments, and thriving rural communities.

“Shifting 9.5 percent of funds to Pillar 2 could hole the Pillar 1 budget and the pivotal role that farming plays will be under serious threat.

“We maintain that if the Scottish Government has to transfer money away from direct payments towards rural development, it should be in line with current modulation levels – of around 6.75 percent - and only increased in 2017 if the Scottish Government can demonstrate that additional funds are required to support projects of real value under the new SRDP.”  

Notes to Editors

  • In its submission to Scottish Government on proposed Pillar 1 to Pillar 2 transfers, NFUS has said a rate of no more than 6.75 percent (equivalent to existing modulation levels) would be acceptable.
  • On that basis, the Union also laid out its priorities for the SRDP.  They are:
    • Maintain the Less Favoured Areas Support Scheme on the proposed budget allocation - a commitment to maintain this essential support will come as very welcome news to the majority of Scotland’s farmers and crofters.
    • Develop and properly fund proposed new measures for new entrants.
    • Fulfil on-going agri-environment commitments
    • Enable agri-environment agreements that end in the next SRDP period to be renewed
    • Revisit woodland expansion targets and base forestry budgets on-going demand
    • Utilise the funds that would have been required to support Land Managers’ Options (LMOs) renewals for a further five years to underpin a new accessible mid-tier scheme and fund any associated small-scale capital works
    • Minimise spend on LEADER at 5 percent (of the EU funds), due to variable performance in the current SRDP that has provided little direct benefit to farmers
    • Maintain the proposed budget allocations for Food and Drink, Knowledge Transfer and Innovation, Crofting Grants (CCAGS) and grants for other small farmers, New Entrant Start-Up Support, and Advisory Services.


Contact Bob Carruth on 0131 472 4006 or Ruth McClean on 0131 472 4108

Date Published:

News Article No.: 163/13

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