A week after Prime Minister Boris Johnson announced £210m for Scottish farming, the debate rages on as to what the money should be spent on. The industry is split between whether the cash should be used to top up low area payments, support price strapped sectors, create new schemes to build industry resilience, or just be evenly split across all farmers. There was concern about the legality of paying farmers additional money outside of the Common Agricultural Policy (CAP) budget while the UK remains within the EU, however the Farmers Journal understands Brussels will be flexible on how the money is spent and views the money as rectifying the formula for historic funding allocations. Scotland’s Rural Minister Fergus Ewing argued that Scotland was entitled to the money because of the low area payments on hill and upland farms, going so far as to call it “theft” by the Westminster government. He has also gone on the record to say the money should be given to farmers in less favoured areas. The significant 20% and then 80% cuts of the Less Favoured Area Support Scheme (LFASS) mean that the additional money would be a timely cash injection for Scottish hills farmers. However, NFUS has been clear that the future of LFASS support is a separate issue to the convergence money and should not be discussed together.

Focusing the money on hill and upland farmers is also the view of former NFUS president Jim Walker, who represented Scotland in the Bew report that recommended the additional money going north.

“We now have to ensure these funds are used wisely to try and make a real difference to Scotland’s LFA producers.”

Price crash sectors

The beef sector has experienced tumbling rewards for finished cattle this summer. The Europe-wide issue has seen blockaded abattoirs abroad and cross-industry beef summits in Scotland.

Neil McCorkindale, chair of the Scottish Beef Association, believes that “some money will be used to get hill and upland farms LFASS payments back up to where they previously were. However, a quick calculation tells me that should leave plenty to give the beef industry the substantial boost that it is crying out for”. He thinks that more than doubling the beef calf scheme to £250/head would “slow down the number of cows leaving the hills and uplands”.

McCorkindale is against putting money into an increase in area payment for all, as “it would not only be a missed opportunity, but would in time lead to Scotland ceasing to be a nation that produces its own food”.

However, with cereal prices back £40-£50/t on last year, arable farmers also feel they are in line for some additional support. If all the money was awarded as a single lump sum across all the hectares of Scotland, it could be worth a one-off payment of £55/ha.

Arable farmer and chair of Ringlink in Scotland, Andrew Moir is calling for the money to be invested in future-proofing farming. He is particularly keen on funding a mentoring programme, as he believes investing in young people will drive farming forward.

In addition, falling milk prices and rising costs for many dairy farmers mean that milk producers are feeling the squeeze this year too.

Meanwhile, due to the potential devastating impact of tariffs on the sheep trade when the UK is outside the EU, the former National Sheep Association Scotland chair John Fyall feels some of the money should be spend on hardship funds for those hit by Brexit.

Price per hectare

The total pot of cash promised to Scotland would have the equivalent of awarding all of the current region two and three ground (predominately hill and upland) a one-off payment of £100/ha. The chair of the crofters federation, Yvonne White believes that the money should be issued as backpay for hill farmers and crofters, saying “we need to make sure that it goes to those areas that receive very low payments”.

There were questions on the legal ability to spend the money in Scotland. However, the Farmers Journal understands that EU officials are likely to permit reasonable freedom to pay the money as it is viewed as rectifying the historic funding allocation formula. As they understand, the money is likely to be targeted towards the groups which are paid less than 90% of the EU average, which is €196/ha.

NFU Scotland is debating its position with a directors meeting to be held on 24 and 25 September. Elsewhere, Holyrood’s Rural Economy and Connectivity Committee is sitting this Wednesday and is also likely to discuss the issue.