The Scottish Government announced its proposal to divide the £160 million award from UK Government into two instalments and use the pot to fill funding gaps in the Less Favoured Areas.
The initial £80 million will be distributed to support active farming, with a focus on those who farm in our marginal uplands, hill farms and island areas.
The funding is the first tranche of a £160 million package the UK Government has agreed to pay to rectify a “historic wrong” relating to EU Common Agricultural Policy funding that it failed to pass on to Scotland between 2014 and 2020.
‘Ensuring the money is used as intended’
Rural Economy Secretary Fergus Ewing said: “In allocating this funding, I am conscious of the need to adhere to the spirit and original premise of convergence.
This approach ensures that the money goes to where it was originally intended – with a significant proportion going to those farming in our marginal and remote areas.
“This funding will also meet my commitment to maintain support for farmers and crofters in the Less Favoured Area.
“I believe this approach gets the money to where it needs to be and will result in all eligible farmers and crofters either increasing or significantly increasing the money in their bank accounts.
“Brexit is by far the biggest threat to farming, and this funding will help provide some security during these uncertain times. This will then enable them to invest in their businesses, pay down debt and ultimately drive the rural economy forward.
“I have given careful consideration in deciding this approach and would like to thank everyone for their support and suggestions on how best to fairly allocate this money over the last couple of weeks.”
Criticism
However, the plan has not gone well with everyone. NFU Scotland president Andrew McCornick said he felt the allocation would “dilute” what the money could have achieved.
McCornick said: “NFU Scotland has made recommendations to Scottish Government on how we believe these hard-won funds can be used to the benefit of all Scottish farmers and crofters. It appears that some of our recommendations have been adopted and it is clear that others have not.
We cannot agree with the Scottish Government’s proposition to use any of the £160 million to address the budget shortfall that exists in the Less Favoured Area Support Scheme for 2019 and 2020 scheme years.
“In year one, it appears Scottish Government intends to strip £13 million from the pot to fund an LFASS-type grazing scheme to cover the LFASS shortfall.
“It is likely that a further £39 million from year two’s £80 million could well be used to fill the holes in the 2020 LFASS budget.
“Using this money, rather than finding that LFASS funding shortfall from usual budgetary sources, dilutes what this funding could have achieved. This funding was derived through pillar 1 direct support and should be spent through pillar 1 direct support means.
“We do support using the funds to increase the basic payment scheme rates in Regions 1, 2 and 3 with extra weighted support to the Region 2 and Region 3 budgets for more marginal land. We also support top-ups to the coupled beef and sheep schemes.
However, the weightings to the regional rate top-ups by Scottish Government justifiably support the hills and uplands but do not accurately reflect the hugely valuable contribution of all land in Region 1.
“As well as highly productive arable land, most of the Region 1 land is grassland and more support here would, in turn, have better supported all our vulnerable livestock sectors.
“Unfortunately, the approach Scottish Government intends to take will immediately lower what all three regional payments could have been and that will have a significant impact on all sectors, especially those underpinned by Region 1 permanent pastures and grassland.”
