Farmers have called for Scotland's 'farm fund shortfall' of almost £190m to be addressed following a 'flawed' decision by government to share the dividend across the UK.
The divided of €223 million (£190m) came about as a result of Scotland’s low payment rate per hectare (approx. €130 per ha). The UK was awarded the sum in 2013 as part of EU CAP reforms.
Scotland’s below average area payment rates is around 45 per cent of the EU average. Consequently, the UK will receive the £190m over the period 2014 to 2020.
However, the UK government chose to share this dividend across the whole of the country based on historic allocations, a decision the Scottish farming industry believes was 'fundamentally flawed'.
NFU Scotland has now said that Scotland’s farm funding shortfall must be addressed in the current Review of Intra-UK Allocation of Domestic Farm Funding, being led by Lord Bew.
The original decision on the distribution of additional EU farm funding was taken by the UK government in 2013 and, since then, NFU Scotland has repeatedly called for, and received pledges from successive Defra ministers, that the decision would be subject to review.
The process is under way and the union has responded to Lord Bew’s Independent Review. It has copied its response to Scottish government’s representative on the review panel, former NFU Scotland President Jim Walker.
The stated objective of the review is to “look at what factors should be taken into account to ensure an equitable intra-UK allocation of domestic farm support funding”.
NFU Scotland President, Andrew McCornick said the convergence dividend issue 'must be fairly resolved to deliver the growth potential' of the Scottish farming industry.
“There remains no objective or rational justification for historic allocations - either now, or between 2020 and 2022, or beyond 2022 - and such an approach remains completely at odds with the European Commission’s rationale for the uplift,” he said.
“Notwithstanding the final outcomes of the most recent extension to the Article 50 process, possibly to 31 October 2019, the UK will continue to be effectively governed by EU rules and regulations and be a participant in CAP schemes, until well into the period 2020 to 2022 to be covered by the Review.
“As a result, NFU Scotland is adamant that the UK’s CAP budget convergence dividend issue must be resolved fairly, by using objective and non-discriminatory criteria, to ensure a fair intra-UK allocation of agricultural funding to 2022.”
NFU Scotland said the review is not just about the CAP convergence funds and their allocation, but also about setting a 'fair and objective precedent' post-Brexit.