The Scottish Government has come up with a £6 million aid package to help those farmers hardest hit by last year’s wet weather and the devastating snow storms of late March.
Livestock farmers in the South-west of Scotland, where fallen stock collections (i.e.casualties) were 50% higher in April for sheep and 25% for cattle, are likely to be the ma in beneficiaries but farmers in Moray, for example, who found their top soil being blown off their newly-sown fields by strong gales, may also qualify.
The move by the government is welcome as there is no doubt that some farmers are at their wit’s end as a result of the losses they have suffered on top of adverse weather through most of last year in many areas and the prolonged winter.
And it’s not just the financial loss. The trauma of losing stock causes real despair and organisations like the Royal Scottish Agricultural Benevolent Institution (RSABI) will have a real role to play in counselling and helping affected families.Quite how the aid package will be distributed and eligible recipients defined to ensure a fair and equitable disbursem ent has still to be worked out. A team of industry experts, under the chairmanship of the government’s chief agricultural officer, Drew Sloan, was due to meet for the first time this week to draw up the criteria.
It is likely that individual payments will be limited and the government will have to be careful not to flout state aid rules which could result in the imposition of penalties by the EU.
Under so-called de minimis rules, the government can award up to 7500 euros (£6320) per farm over a three-year period without breaching the rules and compensation can also be awarded for weather aid if there has been a loss of income of more than 30%. It seems inevitable that a bureaucratic nightmare will be difficult to avoid.
“It is difficult to quantify the amount needed as many farmers are still counting the cost of losses,” said Rural Affairs Cabinet Secretary, Richard Lochhead. “The aid will be targeted at those who need it most, providing a badly-needed lifeline to help them get back on their feet.”
Mr Lochhead said the severe weather which had battered parts of Scotland in recent months with the worst snow in living memory coming hard on the heels of a miserably wet summer, had presented a major challenge for the industry.
“The severe weather – which hit when ewes were lambing and at a time when some stock were already weakened by previous poor weather – has led to severe losses for some farmers,” he said.
“I’ve spoken to many farmers and know the problems the weather has caused, not just in terms of devastating livestock losses but also crops not harvested or not planted and increased feed requirements at a time of rising prices.”
The funding package is on top of the £500,000 previously announced to deal with the costs of disposing of fallen stock.
The move by the government has been welcomed by NFU Scotland as a “very positive result” which could provide a lifeline for affected farmers.
“Some of the worst storms of recent times may now have passed but they have left in their wake losses for every farming sector – a legacy which will have its full impact this autumn when lambs are sold and crops are harvested,” said president, Nigel Miller.
The severe weather problems had impacted across the whole of Scotland, he said, resulting in livestock and crop losses, as well as significantly increased feed requirements.
“For the most affected farms, there will be no immediate relief in 2013 and there will be a hard road back to perhaps more normal production in 2014,” he added.
Mr Miller said the aid package would help cash flow in the short term and provide a pathway forward but he appealed to the banks for a more sympathetic approach.
“The banks still have a crucial role in providing flexible support through overdraft facilities and in being proactive in the restructuring of lending to deliver goals in the medium term,” he said.
With feed, fertiliser and seed costs pushing the boundaries of forward budgeting, Mr Miller also pointed to finance options outwith the core banking sector which could provide an escape route from bank arrangement fees.
However, there were reports of some finance companies seeking to charge excessive interest rates and the union was monitoring the situation closely to get a handle on comparative borrowing costs.
The government has also launched a consultation on funding for rural communities in Scotland under the Scotland Rural Development Programme which has delivered around £1.2 billion of support to rural Scotland in recent years.
The existing SRDP has come to an end and a successor scheme is due to be introduced although the EU funding available is likely to be less than in the past.
SRDP funding is available for a variety of projects, from agri environment and farm diversification to support for village halls.
The government will want to avoid the mistakes of the current SRDP which saw large sums dished out in the early days for large-scale projects which resulted in a shortage of cash for smaller projects later in the programme.
However, Mr Lochhead, although disappointed that the UK government has failed to secure a higher level of funding, is determined to ensure that the support available for Scotland’s rural areas remains meaningful.
“We want to make sure there will still be excellent opportunities to continue to support economic growth, develop vibrant rural communities and further utilise Scotland’s natural environment and heritage,” he said.
With cattle and sheep prices at their highest ever level, the longer term prospects for the industry are good, despite ever-increasing costs. Getting through the next few months will be the key.