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News / NFU welcomes belated government action

On Tuesday night First Minister Nicola Sturgeon intervened in a crisis that has left rural affair minister Richard Lochhead's position in doubt. Photo: Shetnews

THE LOCAL NFU branch has welcomed the news that any crofter or farmer yet to receive the first instalment of their CAP subsidy payment by the end of this month will receive money from the Scottish Government in April.

First Minister Nicola Sturgeon intervened in an effort to address a cash flow crisis facing many in the agriculture industry due to late payments caused by a malfunctioning £178 million new government IT system.

The situation has left rural affairs minister Richard Lochhead in a perilous position, with many expecting that he will be moved aside after May’s Holyrood elections.

On Tuesday night, Sturgeon said: “I very much recognise the cash flow issues facing Scottish agriculture, which underpins our £14 billion food and drink industry.

“That is why the Scottish Government has earmarked up to £200 million of national funds so that any farmer or crofter who has not received an instalment by the end of March receive a nationally-funded payment from the Scottish Government in April.” 

NFU Shetland chairman Jim Nicolson welcomed Sturgeon’s intervention at such an important time of year for the industry.

Nationally, barely a quarter of basic CAP support money had been paid out – just £103 million out of a total budget approaching £400 million. Payments are usually made in November and December.

At a local level, Nicolson said around a third of recipients were yet to receive a payment.

Coupled with poor commodity prices, that has had an impact on farmers and businesses, and the NFU hopes it now has the “clear leadership” it had been seeking from government for months.

“We very much welcome [the announcement],” he said. “It’s really something that the NFU has been asking for and we certainly hope that everybody gets the equivalent of 80 per cent of their payments before the end of April.

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“It’s very important to folk, it’s an expensive time of year for crofters and farmers with bills for feed and eventually fertiliser coming on.”

Nicolson said some of the work on processing payments had been done locally, with around two thirds of payments put through, but “that has to go through the computer system before they actually get the money”.

“There’ll still be almost certainly a third of potential recipients that haven’t got anything as yet,” he said.

Nicolson said the £180 million cost of the IT system seemed “absolutely ludicrous”, and he fears there could be further problems into 2016/17.

“Computers are supposed to save money and make things more efficient,” he said, “yet it does appear that neither of that is the case.

“What’s also worrying is that the NHS had a computer system that didn’t work, costing them £40 million that’s not now being used, and you wonder what’s going to be the outcome of this one.”

He added that it would soon be the time to fill in forms and make claims for 2016/17, and he fears that “if the computer system is still struggling to process this year’s claims, there will be another delay and knock-on effects for another year”.

But, while the NFU nationally also welcomed the availability of government money, the union’s planned rally at Holyrood at 11am on Thursday will go ahead.

Audit Scotland is already looking into what went wrong in the administration of the EU common agricultural policy payments.

Scottish Conservative MSP Alex Fergusson will today (Wednesday) table a motion calling for an independent inquiry into how the SNP administration has “mishandled” the payments – a call backed by the Tories’ Shetland candidate Cameron Smith.

“By the end of last month some 50 per cent of farmers had received some of the payment due,” Smith said, “but that is far from Richard Lochhead’s assurances that ‘most’ farmers would have received their payments by the end of January.”

He added: “The promise made for the end of January was the third indicative deadline given by the cabinet secretary. I find it hard now to trust any assurances given by the government on this issue, and an independent inquiry is needed to get to the bottom of the problem.”

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