Farm payments update

29th January 2016

Action to accelerate pace of implementing new CAP.

Rural Affairs Secretary Richard Lochhead has given an update on progress making payments under the new Common Agricultural Policy (CAP).

In a meeting with industry representatives, Mr Lochhead confirmed that over 5,000 farmers and crofters have now received the first instalment of their payment but due to the challenge of implementing the biggest CAP reform in a generation it was taking longer than expected to process applications - and EU rules expressly prohibit paying out on claims until they have been fully processed.

In response to the slower than expected progress, the Rural Affairs Secretary gave an update on the action being taken by the Scottish Government to pay farmers and crofters as quickly as possible.

He confirmed that as we near the end of January, first instalments have been paid to more than 5,000 farmers and crofters - almost 30 per cent of the 18,000 or so eligible claims - with more authorised payments expected to arrive in banks in the coming days.

Mr Lochhead said:This is the biggest CAP reform for a generation, and its implementation is tough - but we always knew this would be the case when we took the decisions with industry to tailor the policy to deliver the best possible outcomes for Scottish agriculture. In this transition year between the old CAP and the new CAP we are having to move to a whole new basis for allocating funds based on area of land, as well as implementing new greening measures and introducing a raft of new schemes to support agriculture.

The Scottish Government has already made more than 5,000 payments - which is almost 30 per cent of the 18,000 or so eligible claims - with more initiated to arrive in the coming days. The first instalments we have paid are worth approximately 80 per cent of the value of Basic and Greening – much higher than the 70 per cent originally promised.

I share the industrys disappointment and frustration that we are not making faster progress, and I recognise the need to take further action to speed up payments. That is why I have instructed the deployment of additional staff to area offices and for applications to be processed seven days a week, and I will now ensure the Scottish Parliament and industry are updated more regularly on progress.

I fully recognise the importance to farmers of receiving these payments as early as possible within the EU's payment window of 1st December to June 30th and the Scottish Government is delivering, albeit at a slower pace than we’d all hoped.

My officials have informed me the extreme complexity of the new CAP means claims are taking longer to process and EU regulations prevent us from issuing payments until all of the necessary checks have been completed. It is worth remembering that Scotland is well ahead of where other parts of the UK were at a similar stage in moving to area-based payments during the last CAP reform – and that was without having to implement greening and a new rural development programme at the same time.

My officials are working as hard as possible to make as many first instalment payments as we can by the end of March, and the balance of payments soon after. The first instalments we have paid are worth approximately 80 per cent of the value of Basic and Greening – much higher than the 70 per cent originally promised.

In the meantime, area offices will aim to prioritise hardship cases where possible, and anyone who is concerned about their own payment can contact our customer helpline on 0300 300 2222. The Scottish Government will also continue to liaise with banks who have provided bridging finance in many cases.

Scotland’s Chief Agricultural Officer David Barnes added:This is the first time ever that Europe has simultaneously overhauled the direct payments system and rural development support – and EU rules now require Scotland’s CAP payments to be based on area rather than historic levels of production.

And – based on extensive consultation with industry - two Scotland-wide direct income support schemes are being replaced with six regionalised schemes, which add additional complexity this year, but will deliver long term benefits for Scottish agriculture.

We have also had a number of one-off first year tasks which will not have to be repeated in future years. For instance almost half a million fields have had to be allocated to one of the three new payment regions in this first year of the new CAP, alongside the processing of 21,000 Single Application Forms (SAF) as well as individually inspecting 1,300 farms.

While we’d all clearly hoped to be further ahead than we are, EU regulations prevent us from issuing payments until all of the necessary checks have been completed and we are doing everything we can to avoid claimants receiving incorrect payments or the loss of funding through EU disallowance that counterparts in other parts of the UK have faced in the past.

Despite the significant challenges we are facing, the Scottish Government has delivered at key stages of the process including registering for the new online system, opening to applications and starting payments. We continue to work flat out to process and pay as many claims as quickly as we possibly can. Of course, it is particularly challenging for the 1,300 farms which have been inspected as we must complete additional checks.