New loans for Scottish farmers as problems with CAP payments continue

Fergus Ewing - Parliament TV

A new government-funded loan scheme will guarantee Common Agricultural Policy (CAP) payments for Scottish famers, Rural Economy Secretary Fergus Ewing has announced.

Farmers and crofters will be able to apply for an interest-free loan of 80 per cent of their CAP Basic Payment and Greening 2016 entitlement, up to a maximum of €150,000 and receive their loan payments in November.

The announcement comes after the failure of a £178m government IT system caused severe delays to farmers receiving payments this year, with Ewing admitting to MSPs that some outstanding cases may not be fully paid by a 15 October deadline.

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In a statement in the Scottish Parliament, Ewing said: “I am confident that we are putting the 2016 payments on a better footing.

"I am also reassured that the arrangements we have put in place with our IT contractor mean that they should be able to deliver on the timescale they have committed to for payments.

"But those arrangements are not risk free and frankly, these are not risks I am prepared to take, particularly with families and communities’ livelihoods.

“Having learned lessons from the 2015 round of CAP payments, I am determined to provide as much certainty as we can, not just for farmers and crofters, but for the wider economy in our rural communities."

Scottish Conservative rural affairs spokesman Peter Chapman said the statement was "an admission of failure."

"He can't deliver 100 per cent payments in December as we should expect - instead he has to offer an 80 per cent loan for November," he said.

In May Audit Scotland produced a damning report into the Government's handling of the IT failures