News / Crofters offered loans instead of subsidies

Rural affairs secretary Richard Lochhead has come under heavy fire for the Scottish government's failure to deliver farm payments anywhere near on time.

THE SCOTTISH government is creating a £20 million hardship fund for crofters and farmers suffering from late subsidy payments.

Rural affairs secretary Richard Lochhead said producers could borrow money from the fund while waiting for their Common Agricultural Policy payments.

The government has come under heavy fire for the long delays in getting payments out after an extremely tough year for the industry.

On Friday Lochhead said 40 per cent of the 18,000 eligible claims had been authorised, but said the first instalments would not be out until next month with the rest of the cash being made available “as soon as possible after that”.

He again stressed the problems that reform of the CAP has created for the system, though critics point to the government’s disastrous implementation of a  computer processing system for payments costing tens of millions of pounds.

Lochhead said: “We are making progress. However the extreme complexity of the policy we agreed with industry in Scotland – which is being delivered by a brand new IT system that we are constantly working to improve – means it is taking longer than expected to process applications – and I am aware that as a result some farmers and crofters are facing hardship.


“That is why the Scottish government is taking further action to ease cash flow pressures in the sector by earmarking up to £20 million to ensure those most in need can access the credit they require until their payments come through.

“We will work with NFUS, banks and others to finalise the detail of the scheme and ensure it is available as quickly as possible and simple to access.”

Conservative MEP Ian Duncan rounded on the secretary, saying: “Mr Lochhead has been repeatedly warned for over a year that his plan for delivering basic farm payments was bound to fail.

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“His excuse that it is ‘complicated’ does not wash with farmers.

“To take until the second week of February to apologise for the debacle, and then offer a Government-backed loan, is simply not good enough.

“Farmers want the money which is sitting in the Scottish government bank account, not loans.”

NFU Scotland chief executive Scott Walker commented: “Scottish government has recognised the severe financial pressures that many farm businesses are under. “But for this money to be effective it must be delivered quickly.

“We will be working with the Scottish government on the details of this funding but it is imperative that it is put into place swiftly.”

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