A crucial year for Scottish farming

2015 will be a crucial year for Scottish farming as the reformed Common Agricultural Policy, which kicked in on January 1, starts to bite.

The main thrust of the reform is the gradual move away from support based on farming activity over the three years from 2000 to 2002 to an area based system and the introduction of new greening measures on which 30% of the new Basic Payment Scheme (BPS)– which will replace the Single Farm Payment (SFP) – is based.

Coupled with a reduced budget, farmers are facing the abyss of substantially reduced support, following a 12% average cut for 2014, at a time when the price of almost every farm commodity has hit the floor.

The most productive farms will be hit hardest.2014 ended with an escalation of the ongoing spat between the Scottish Government and NFU Scotland on the implementation of the new CAP arrangements and this is likely to continue into 2015 with confusion continuing to reign and decisions on some aspects of the rules still awaited.

However, the Government has now clarified the minimum activity rules which, it is hoped, will effectively rule out slipper farming which has enabled retired farmers and speculators to qualify for support without carrying out any real farming.

Under the new rules, farmers with land which has to be maintained in a state suitable for grazing or cultivation will need to take steps to control injurious weeds and maintain features normally associated with active grazing on this kind of land.

Farmers with land that is naturally in a state suitable for grazing or cultivation will need to be sure that for 183 days in the year they either meet a minimum stocking density of 0.05 livestock units per hectare or, where justified, a minimum stocking density that is in line with the carrying capacity of the land.

If this stocking requirement cannot be met, vegetation will have to be cut on an annual basis.

NFUS director of policy, Jonnie Hall, says the new rules should prevent a new generation of slipper farmers from simply occupying land to claim support payments without freezing out genuinely active farmers on extensive hill farms.

But he adds: “The requirement to cut vegetation if there is no livestock grazing must be implemented across every claimed hectare, otherwise Scotland’s limited direct support budget could bleed to empty hillsides.

“We will be working closely with the Government to ensure that only those actively farming can access our limited support payments.

“It is vital that we exclude inactive or token farming if we are to protect payments for those farming Scotland’s uplands as they should be.”

But on the wider issues surrounding the new CAP, NFUS president, Nigel Miller, has launched a withering attack on the Government, despite getting what the union wanted in the policies announced by the Government way back in June. Mr Miller has branded the Government’s decisions on implementation as a “leap in the dark” which will push many established farm businesses over a cliff edge and failing to provide support through a national reserve to new entrants.

“Earlier indications of a soft landing transition (from the historic to an area based system) for those businesses currently claiming support have frittered away,” he says.

“The Government has failed to share its thinking with producers and Scotland will move into the new era of CAP with a jolt which will be most acutely felt by the most productive farms.”

Scotland’s approach to transition, he says, is in stark contrast to that being adopted in several other member states where producers will be cushioned by the so-called Irish tunnel model designed to bring support levels in each country nearer to the EU average.

Mr Miller accuses the Government of a focus on a payment system shaped to suit software designers and deliver payments on time next December rather than Scottish policy requirements.

“The stakes are high and there will be collateral damage to some Scottish farming businesses by focusing solely on what fits computer systems and the payment date,” Mr Miller warns.

The national reserve and transition models are flawed, Mr Miller claims, and the Government has been unable to quantify their likely impact. He has called for an immediate independent analysis of the systems and the development of an easy-to-use ready reckoner to help farmers calculate the effect on their own businesses and fill an unacceptable short-term information void.

“Producers have a right to be angry with Scottish Government over this frustrating and drawn-out approach to transition,” he says. “Scottish farming must be able to plan its way out of problems.”

But a Government spokeswoman has hit back, describing Mr Miller’s claims as nonsense and firmly denying accusations of lack of transparency.

“The Scottish Government has been transparent throughout the CAP reform process and shares the union’s frustration at the ongoing uncertainty caused by EU rulings,” she maintains.

“The message we have been given throughout this process is that putting the right support mechanisms in place should be the priority.

“That is what we have done and it is nonsense to suggest otherwise. The Irish tunnel model would fail to correct the scandalous disadvantage suffered by many Scottish farmers, especially struggling new entrants, under the old CAP system.

“A generic ready reckoner could risk giving misleading results and create greater uncertainty.”

Not the best footing to start off the New Year when it will be essential for the industry and Government to work together to come to the right decisions.