Cabinet Secretary announcement on loan scheme provides clarity to farmers and crofters

NFU Scotland has welcomed today’s announcement from Scotland’s Cabinet Secretary for the Rural Economy, Fergus Ewing, that a national loan scheme will be made available to 17,000 farmers and crofters this autumn.

That national scheme has been set up to fill the gap that would have emerged in the rural economy as the Scottish Government’s IT system to deliver CAP payments continues to struggle to be fit for purpose.

In a statement to Scottish Parliament, Mr Ewing indicated that every farmer and crofter eligible for CAP funding under the Basic Payment Scheme, Greening or Young Farmer elements will be able to apply for a loan worth up to 80 percent of the value of their entitlements. Letters to eligible businesses will be issued at the end of September, with an application deadline of 12 October, creating the potential for up to £300 million to be injected into the rural economy in the first few weeks of November.

Given the severe difficulties experienced in delivering CAP payments under the 2015 schemes – a process that, due to IT problems, has yet to be completed – NFU Scotland urged the Cabinet Secretary to consider a national scheme to drive up producer confidence and give a lift to the rural economy after a very difficult year.  

In welcoming today’s announcement, NFU Scotland President Allan Bowie said: “Cabinet Secretary Fergus Ewing was candid about the challenges he, and his staff, continue to face in completing the 2015 payment run but he has also shown a clear commitment to the wider rural economy with his announcement today.

“Knowing that up to 80 percent of your support package will be delivered in early November gives clarity and certainty to farm businesses.  This announcement will have a positive impact on the whole rural economy.

“The bitter legacy of the flawed 2015 payment run continues and the Cabinet Secretary again apologised for the problems, some of which still remain.  On behalf of our members, we will continue to keep pressure on the Scottish Government until all outstanding payments for 2015 have been delivered.

“However, it is clear that the Cabinet Secretary has had commitments from those responsible for the flawed IT delivery systems that, by next year, IT functionality will be resolved and he has stated his intention of returning to the chamber in January 2017 to give a further update. A statement to the lead Parliamentary committee is also scheduled for next week.

“As a Union, as we seek to rebuild trust and confidence in the system, more regular updates to industry and Parliament may be appropriate.

“The next key date for Scottish Government is mid-October when, to meet the extended EU deadline and EU audit requirements, the vast majority of 2015 payments must have been completed.  The Cabinet Secretary will also be addressing farmers at the annual AgriScot event on November 16 when the audience will be keen to hear of progress with the new loan scheme announced today.

“If the Cabinet Secretary’s scheme has delivered, then those in the supply trade taking stand space at the AgriScot event can expect farmers to arrive in a mind to do business.”

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Contact Bob Carruth on 0131 472 4006