Hansard

If Mr Fergusson speaks to any farmer or crofter in Scotland, they will tell him that those are serious issues that have affected their cash flows. He might find that a laughing matter, but many businesses out there are suffering right now because of those issues.

We have been working tirelessly. We started paying the first instalments in December. We have now made basic and greening payments to more than 10,500 farmers and crofters, which are worth about 80 per cent of their total payments, whereas our initial target was to make at least 70 per cent. About 59 per cent of farmers and crofters have been paid as of today.

However, we have not been progressing as expected and, as I have said many times, that is deeply disappointing. Where we are is not good enough, and for that I apologised to the industry. The IT system is working, but not anywhere nearly as quickly as we all want, and I fully accept that.

Under the EU rules, we have to complete detailed checks on every claim before we can authorise payment, and it is only after payments are made that the EU reimburses us. The IT system has to validate each and every claim against 400,000 fields and more than 500 EU rules. I ask members to just think of that for a second: every claim involves 400,000 fields and more than 500 EU rules. Officials are constantly having to improve the IT system—which we are using for the first time and which Europe said that we had to build and implement—to speed up the process and unblock cases. We have drafted extra staff into our offices and our IT teams have been working day and night.

As I have said before, ministers absolutely believe that we have to learn lessons. We are co-operating with Audit Scotland, which will produce its report in due course, and we will support any subsequent inquiry. That is clearly a matter for the next Parliament, as the NFUS president rightly said this morning.

In the meantime, the absolute priority is to get the payments out the door. In particular, getting the whole of Scotland sorted into three payment regions has been a massive challenge. Regionalisation was one of the huge problems that the Rural Payments Agency in England faced in the previous CAP reform, when things went disastrously wrong for it. I am told that, at the same stage as we are at now, the agency had paid less than 4 per cent of businesses. We are going through the reforms that England went through in 2005, plus another set of reforms. In Wales, this time, the Government could not find a workable regionalisation model at all, so it abandoned the idea.

Here in Scotland, many key players in the industry were absolutely insistent, for good reasons, that there had to be three regions and not the two that the Scottish Government originally consulted on. We have been working hard to deal with those challenges and to get the payments out the door. In the meantime, in light of the rate of progress and the challenges that farmers face, we have been taking decisive action.

As Alex Fergusson mentioned, I announced the cash-flow scheme for farmers and crofters who are facing severe hardship. I also announced the national LFAS scheme for hill farmers, under which payments will begin later this month. It will inject £55 million into many of the more remote and fragile areas of Scotland. In addition, we announced that the payment of coupled support for the beef sector will be accelerated to mid-April to match last year’s timing, and yesterday we earmarked up to £200 million of national money for a national basic payment scheme—similar to the LFAS scheme—to get payments in April to every eligible farmer and crofter who has not had a first instalment by the end of March. That is on top of the £115 million that has already been paid out since payments started in December.

My amendment reflects those important steps. It also points out the irony of the Conservative Party’s position. The fact that we are weeks away from an election might have made the Tories suddenly realise that direct payments are vital to Scotland but, if the issue was left to them, farm payments would be abolished. That is not just pillar 1 payments; LFASS has already been abolished in other parts of the United Kingdom. It has to be said that that is also the Labour Party’s position. If it was up to those parties, we would not be talking about late payments; we would be talking about non-existent payments.

The Government will continue to defend farming and crofting in Scotland and to work flat out to support the sector through these tough times. I urge Parliament to support the Government’s amendment.

I move amendment S4M-15844.3, to leave out from “the financial difficulties” to end and insert:

“that the common agricultural policy (CAP) currently being implemented is the most radical and ambitious ever, with unprecedented simultaneous reforms to both Pillar 1 and Pillar 2 of the CAP requiring around 20 schemes to be launched during 2015 and the introduction of greening measures and three payment regions; notes that the timetable of EU negotiations and decisions left administrations with a short timescale in which to implement such radical reforms; welcomes the fact that the Scottish Government engaged comprehensively with stakeholders during the development and negotiation of the policy, and that both stakeholders and the Scottish Government agreed that securing the right policy outcomes for Scotland was the priority even if this risked impacting on the timing of payments within the 1 December to 30 June Pillar 1 payment window; notes that the Scottish Government had issued over 10,000 payments worth around 80% of basic and greening payments to 56% of eligible farmers and crofters as of 7 March 2016; acknowledges that, at the same time as the transition to the new CAP, farmers are facing additional difficulties due to market trends and unfavourable weather and therefore welcomes the announcements of steps by the Scottish Government to accelerate basic payments to farmers using Scottish Government funds and the national less favoured area support scheme expected to deliver payments to the vast majority of eligible farmers and crofters by the end of March 2016; commits to learning lessons from the implementation of the new CAP, and supports the continuation of CAP payments as one of the benefits of Scotland’s continuing membership of the EU”.