£50,000 subsidy cap would hit 10% of farmers

Setting a limit of £50,000 of subsidy payments per farm would hit 10% of farmers and raise £60m, according to Scottish Government figures. The figures are just one of a range of scenarios looking at reducing the amount of direct support any single farm could claim from the Government in their Stability and Simplicity paper which consults the industry on future farm support. The principle of capping is also part of Defra’s recent Health and Harmony document.

Support payments in 2018 already have an upper limit of just over £530,000 per business. However, pressure is building to set a lower cap on payments in the future. The recent Agricultural Champion’s report recommends the Government look “extremely closely” at EU proposals to limit payments to £52,000.

The Scottish Government in their transition paper said: “Should any changes to capping be introduced, our strong preference is to adopt a very simple system that reduces complexity and promotes certainty over payment levels during the period in which it might apply.”

The Government’s transition paper maps out five different levels of capping from a £200,000 limit down to a £25,000 limit. The lowest limit would affect 5,000 businesses representing just over a quarter of all claims. The £25,000 cap would generate a potential £140m in spare money which the Government could re-deploy to other schemes or claimants. In the consultation the Government says: “A more progressive capping policy could be a first step to a future agricultural policy which widens the benefits/range of recipients, and supports new entrants and small businesses.”

NFU Scotland’s director of policy Jonnie Hall said the Union was currently considering whether to support capping payments or not, however, “as things stand, NFU Scotland does not believe that any blunt cap on direct payments to larger recipients would be the most effective approach to foster the desired changes that both the Union and Scottish Government are seeking across all Scottish agricultural businesses and sectors.

“NFU Scotland is currently considering alternative approaches that would be more proportionate and fair. The options being analysed would allow a more effective means of recycling funds back to farmers and crofters so that they can take forward managed change.”