NFUS has warmly welcomed confirmation that the Scottish Executive will start to issue the new Single Farm Payments to Scottish farmers in December. This follows agreement at a European Commission committee meeting yesterday (Wednesday).

There had been concern that because of system delays in England, where farmers are unlikely to see any support payments until at least February 2006, there could be knock-on effects for Scottish farmers. This is because of a technicality relating to the funding of the Single Farm Payment National Reserve.

NFUS has been pressing the Executive to ensure it issues as much of the payment as possible to farmers as soon as the official payment window opens in December. The Executive has now gained EU approval for that approach and confirmed that it expects to issue at least 70 per cent of a farmer's Single Farm Payment (SFP) in December. The remainder will be paid once it can be determined what percentage deduction is required from each SFP to fund the national reserve.

NFUS President John Kinnaird said:

“We have been asking the Executive to ensure it issues as large a percentage of the payment as possible to farmers in December. The Minister made the commitment to do so at our AGM in February and he and his officials have worked hard to ensure Brussels gave them the green light. The confirmation that at least 70 per cent will reach farmers before the end of the year is extremely important.

“There has always been a concern about cash-flow because this is the first year of the new system. Instead of regular issuing of support payments throughout the year, businesses have had to either borrow or adjust expenditure plans to take account of the new annual payment.”

Farmers have received estimates of their individual Single Farm Payment from their local Scottish Executive office. NFUS is reminding farmers that those figures are subject to further percentage deductions for modulation (6.5%) and the national reserve (estimated to be around 3%). The estimates are expressed in euros and the guideline exchange rate used in the letter was €1 = £0.70p. However, the final exchange rate has now been set by the Commission at €1 = £0.68195p.

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