Over 10,500 Scottish farmers have already opted to accept the Basic Payment Scheme loans ahead of the deadline this Friday, 20 October. While farmers can still apply for the interest-free loan after that date, they will not be guaranteed payment in November.

Offers were originally made to 16,000 businesses in mid September. While just two thirds of those had opted in by the start of the week, 74% of eligible BPS applicants availed of government loans last year.

“I would encourage those who wish to receive a loan, but have yet to apply, to do so as soon as possible,” Cabinet Secretary for the Rural Economy Fergus Ewing said. “We are working hard to make offers to the remaining eligible businesses who have not yet been offered a loan, and we hope to offer loans to these businesses by the end of October.”

The loans are worth up to 90% of the farm’s basic payment and are in place as the government has not yet built a suitable IT system to be able to make the payments to farmers on time.

NFU Scotland is urging its members to apply for the loan on time to receive payment in November.

“While the response rate to the loan letter is good, this is a nudge to those still to opt in that they have to act now and get their replies in if they wish to be considered for the first run of loan payments,” said the NFU director of policy, Jonnie Hall.

“This is proving to be a difficult and challenging autumn for farmers and crofters, and the reality is that a long, costly winter lies ahead. This loan scheme gives farmers and crofters the opportunity to opt in for a loan that will go some significant way to easing the cashflow worries that will already be building.”

New entitlements

Some BPS applicants who have new entitlements this year may not have received their loan offer yet. However, the government said that work is continuing “to ensure all eligible businesses that have not yet been offered a loan receive an offer by the end of October. These businesses can then expect payment before the end of November.”

This could be affecting up to £3m worth of BPS loans. In 2016, there were 37,514 entitlements transferred between businesses, with a value of £2,598,610.

“The transfer process is a midden of confusion,” said consultant at Davidson and Robertson Rural Dr Gerald Banks. “There is no interpretation or opportunity to change things if anything goes wrong. Transfer of entitlements is complicated, as it often comes as part of a deal [when] buying or selling land.”