Government offers £50m of loans to farmers awaiting delayed payments

Farmers waiting on delayed payments are to be offered £50 million of loans from the Scottish Government.

Those still waiting on 2016 payments under the Less Favoured Area Support Scheme (LFASS) will receive letters by the end of the month inviting them to apply.

Scottish ministers announced the move following calls from the National Farmers' Union of Scotland (NFUS) to once again bypass the troubled IT system through which payments are supposed to be issued.

The £178 million system set up to deliver European Common Agricultural Policy (CAP) payments has been beset by delays and increasing costs.

Ministers were forced to issue loans last year after some farmers and crofters warned they faced severe financial hardship.

Earlier this year, Rural Economy Secretary Fergus Ewing admitted there were still “significant risks” around the system.

Announcing the new loan scheme, he said: “Fixing the CAP payment issues remains my number one priority.

“And while our focus remains on getting 2016 payments made as soon as possible, the situation regarding LFASS is not good enough.

“I understand absolutely how important these LFASS payments are to farmers and crofters in our most remote and marginalised areas.

“Having considered how best to address the situation, and importantly heard the views of the NFUS and other stakeholder organisations, I can confirm that we are making available LFASS loans again this year.

“Letters will be issued before the end of the month to farmers inviting them to apply. This will deliver support of around £50 million to some of our most vulnerable farmers and crofters, providing much needed financial security in the coming months.”

Mr Ewing also provided an update on progress to deliver remaining 2016 farm payments, with 90% of basic, greening and young farmers payments now made.

Additional 10% top up payments are due by the end of June.

A range of other payment types are due to be made throughout the coming months, into the autumn.

Mr Ewing added: “We always knew 2016 would be a difficult year as we continue to increase the functionality of the IT system.

“That work means that some 2016 scheme payments have to be scheduled for later in the year and while that is not ideal, farm businesses need to know the likely timescales to help with their forward planning.

“The schedule prioritises the payment of core direct support to reach the greatest number of farmers and crofters and I expect the vast majority of farmers and crofters will receive all their basic and greening payments by the end of June.

“I want to reassure all farmers and crofters that officials continue to work flat out to a detailed plan to put 2016 payments on to a better footing.”