£160m of backdated subsidy for Scottish agriculture sector

October 30, 2019

Active farmers and crofters will benefit from the first instalment of convergence funding that the Scottish Government has long campaigned for.

The initial £80 million will be distributed to support active farming, with a focus on those who farm in our marginal uplands, hill farms and island areas.

 

The funding is the first tranche of a £160 million package the UK Government has agreed to pay to rectify a ‘historic wrong’ relating to EU Common Agricultural Policy funding that it failed to pass on to Scotland between 2014-2020. The payment follows a sustained campaign by the Scottish Government and stakeholders.

 

Welcoming the fact that the funding is to be paid this financial year, Rural Economy Secretary Fergus Ewing said: “In allocating this funding, I am conscious of the need to adhere to the spirit and original premise of convergence. This approach ensures that the money goes to where it was originally intended - with a significant proportion going to those farming in our marginal and remote areas. This funding will also meet my commitment to maintain support for farmers and crofters in the Less Favoured Area.

 

“I believe this approach gets the money to where it needs to be and will result in all eligible farmers and crofters either increasing or significantly increasing the money in their bank accounts.  Brexit is by far the biggest threat to farming and this funding will help provide some security during these uncertain times.  This will then enable them to invest in their businesses, pay down debt and ultimately drive the rural economy forward. 

 

“I have given careful consideration in deciding this approach and would like to thank everyone for their support and suggestions on how best to fairly allocate this money over the last couple of weeks.

 

“This approach respects the spirit in which this money was intended, and will, as far as we can achieve, close the gap in support between Scottish farmers and crofters and the EU average.”

 

Background

 

On 4 September, the Chancellor confirmed that the UK Government would return £160 million of funding that was denied to Scotland by previous UK administrations.

 

Under the last CAP reform, the UK qualified for a £190 million uplift because of Scotland’s extremely low average rate per hectare. Without Scotland, the UK would not have qualified for this money.  The UK Government of the time decided to distribute the funding across the UK, with Scotland receiving £30 million, which was £160 million below what was due.

 

Further details of the funding arrangements will be made available in due course.

 

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