Difficult choice ahead as Scotland moves from historic single farm payment

Difficult choice ahead as Scotland moves from historic single farm payment

We must support active farms and target support to maintain production in order to drive the Scottish food and drink industry, said NFU Scotland following a Scottish Government conference.

Possible payment models were outlined at the seminar by the James Hutton Institute outlining how direct support might be paid in Scotland under an area-based payment system, which is likely to be introduced from 2015. While the models did not predict what the payments might be under the new CAP, they showed the challenges that lie ahead.

NFUS believes that in order to remain competitive, Scotland’s farmers must receive a fair share of the UK CAP budget. ‘Internal convergence’ i.e. levelling of UK regional budgets needs to happen during the transition to an area-based payment system. The EU Council of Agricultural Ministers has set a target of €196 per hectare as its goal, and it is imperative that this target is met across the UK.

Discussions on the CAP framework will continue at least until June this year, meaning it will not be possible to make decisions on the final structure of payments in Scotland until the scope for flexibility is known; however, the work presented today is very helpful in informing the debate.

Commenting at the conference, NFU Scotland’s President Nigel Miller said: “Today’s seminar was another important step in determining the support structure that will replace the existing single farm payment. The new CAP’s finer details are still being decided and it is important that we ensure the gains that have been already secured make their way into the final agreement, as well as making progress on some of our outstanding greening issues and achieving greater flexibility on coupling.

“Today’s conference focused on Scotland, how we define areas and the payment within those areas. It is important that we look beyond Scotland at how we compare with other recipients across the EU. Farm businesses in Scotland need to receive equal support to comparable farm businesses in UK and the EU, and this is why convergence of the budget is so important.

“It is clear that the EU’s intention is an average payment of €196/Ha across the EU by 2020. Scotland is long short of this and it is imperative that this target is delivered through internal convergence of UK regional budgets.

“It is also important that new businesses are prioritised at the start of this reform to ensure that they receive the same support as established businesses. If this can be achieved then a period of transition for other businesses is essential to provide the stability required until budget convergence can be achieved. The reform process has opened up the option of partial convergence until 2020 and this tool is now an attractive option for Scotland given the low budget available to support an area-based system.

“Today again highlighted the complexities of an area-based payment system and the likely redistribution that will occur. Even an optimal based area payment will be a blunt tool and present real dangers unless mapping is achievable at a fine detail down to individual farm level. Potential problems for both the beef and dairy sector were highlighted under all area-based scenarios and demonstrated the need for a coupled payment to ensure that production in these sectors does not reduce dramatically.”

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