NFU Scotland will be in Luxembourg this week fighting for the existing funding arrangements for the Scottish Beef Calf Scheme (SBCS) to remain in place.

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The scheme currently delivers around £20 million pounds to Scottish beef farmers but the future of this scheme is now under threat in light of emerging information on how it may have to be funded in future.

Under European proposals for the Common Agricultural Policy, the current funding arrangements for the SBCS, whereby beef producers themselves fund the scheme, will not be permitted. Instead, Europe is suggesting that all recipients of support through the Single Farm Payments Scheme (SFP) – whether involved in beef, sheep, cereals or dairy – would face a deduction from their single farm payment if a specific pot of funds such as the SBCS is to be created in the future. Asking all sectors to fund a stand alone beef scheme would be unacceptable to NFU Scotland and its members.

NFU Scotland’s Chief Executive James Withers and Policy Director Scott Walker will be at the Agriculture Council of Ministers meeting in Luxembourg next week arguing for existing funding arrangements of the SBCS to remain unchanged. It will be top of the list of a number of issues that NFUS will focus on as part of next week’s CAP health check discussions.

Speaking ahead of the Luxembourg visit, James Withers said:

“Under the current funding arrangements for the SBCS, the Scottish Government has taken 10 per cent off the beef element of every farmer’s Single Farm Payment to provide for the calf scheme. This scheme then delivers money back to beef farmers by paying on all beef calves born in Scotland. We’ve always had doubts as to the effectiveness of this standalone scheme in maintaining beef production. The Scottish Government’s own independent analysis of the scheme backs that view up. However, we believe if the scheme is packaged as one part of a broader support structure it could help underpin our beef industry.

“Our members have already told us that this scheme should continue as part of a wider package of measures to support the beef industry. However, during our consultation around the country, there was also a consensus that taking funds from one sector to fund another sector is wholly unacceptable.

“We now understand that, under the European proposals, we will not be able to operate the funding for the beef calf scheme in the same way as we do now. Despite having created a pot of money for the beef calf scheme, this may have to be returned to the Single Farm Payments from which it came and instead all SFPs in Scotland would be top sliced to create the SBCS. This being the case it would mean the sheep, arable, dairy and beef sectors in Scotland would all lose some of their SFP - over 4.5% - to fund a beef calf scheme. We cannot support this.

“We have been focussing on potential solutions to the destocking problem being seen in many parts of Scotland. We’ve been looking at that in the knowledge that we need to focus on making better use of existing funding. The SBCS must be part of the solution and is one strand of our manifesto for farming in Scottish hills and uplands.

“However, given low levels of profitability on all Scottish farms, the support for beef calves must not come at a direct cost to other agricultural sectors in Scotland. Indeed, these proposals could accelerate the drop in sheep numbers, as specialist sheep producers would find their support slashed without any ability to get benefit from the resulting scheme.

“We will be in Luxembourg arguing for our existing scheme and its funding arrangements to be retained so that Scotland’s sectoral approach to maintaining Scotland’s beef herd is preserved without creating a drain on other hard pressed sectors.”

• The Council of European Agricultural Ministers is taking place in Luxembourg on Monday 27 October and Tuesday 28 October. Ministers will be discussing current proposals for reforming the Common Agricultural Policy as part of the Commission’s Health Check. As part of the Health Check, proposals would permit the creation of sector-specific national envelopes to help promote production in a country or region.
• The Scottish Beef Calf Scheme (SBCS) was introduced in 2005 under the ‘national envelope’ provisions of Article 69 of the EU Single Farm Payment Regulations (EC 1782/2003). The stated objective of the scheme is to support beef production in Scotland for “environmental and product quality and marketing reasons”. Until now, the scheme has been funded by top slicing 10 per cent of the beef element of the Single Farm Payment, to make an annual payment on calves. This is required because national envelopes must be funded from the same sector that they seek to support. However, under new EU proposals, the funding arrangement would change significantly.
• The current budget for the Scottish Beef Calf Scheme is €29.8 million. To maintain funding for the scheme at this level would require approximately 4.7 per cent to be taken from the Single Farm Payment of all Scottish farmers.

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