In response a Parliamentary Question from North East MSP Mike Rumbles the Rural Economy Minister has admitted that the Scottish Government may have to issue pre-payment CAP loans for the third year in a row. Earlier this month the Scottish Government narrowly escaped being hit by huge EU fines of up to £50 million for missing the Basic Payment deadline because the UK as a whole and as the member state was able to reach the 95% of payments threshold.
This July the Scottish Government missed the deadline for farm support payments for a second year running. However, thanks to payments being made on time in England and Wales the penalty measure were not invoked. Even so, many MSPs and rural organisations have expressed fears that at the current rate the payment system may not be fixed before the 2017/18 round of Basic Payments is due this Winter.
Mr Rumbles said: “What was a thorn in the Scottish Government’s side risks becoming a fatal wound for our rural economy. If our communities in rural Scotland are forced to endure a third year of uncertainty and inept handling of support payments, the damage could be irreparable.
“Normally EU Basic Payments worth £500 million would be injected into our rural economy in December each year. That is not just for farm businesses, the money finds its way to thousands of local businesses and services. But the Scottish Government’s ad hoc loan scheme has failed to provide anywhere near that level of support.
“The Scottish Government have had a lucky escape this year but there is no end in sight. Scottish Farmers have lost all faith in the Scottish Government to get to grips with this debacle of its own making, and the news that they may have to put up with another year of loans will be yet another blow.
“I can understand perfectly well why many farm businesses have refused to take up the loan scheme in the past but the Scottish Government is not doing its job if this money stays in its bank account in Edinburgh.”
Notes for editors:
Parliamentary Question: Mike Rumbles (North East Scotland) (Scottish Liberal Democrats): To ask the Scottish Government whether it plans to offer its loan scheme to farmers for the 2017-18 round of CAP basic payments. S5W-10150
Fergus Ewing: The Scottish Government’s aim is to deliver improved timescales for 2017 CAP payments. As I have already indicated publicly, the option of a loan scheme for the 2017 Basic Payment scheme forms part of our considerations to achieve this.