The Golden Child and her leadership of the Tory party in Scotland
In recent months Ruth Davidson and the Tory Party have been actively working, together with the National Farmers Union (NFU) intent on placing blame, with the Scottish government for alleged late payments of financial support entitlement to farmers in Scotland.
But the truth of the matter will out since the sustained and unwarranted attacks on Rural Affairs Secretary Richard Lochhead were without foundation, cynical and politically motivated by the Tory Party and its leader (the Golden Child) Ruth Davidson who also had the audacity to ask for a full and independent inquiry into alleged late payments calling the Scottish Government’s handling of the situation “shambolic”.
But, under European Commission rules, the Scottish government is required to make payments between 1 December of the scheme year and 30 June the following year and almost 50% of claims have been settled before the end of March!!!!
The Tory party in Scotland and the NFU of Scotland, in their campaign of mischief making conveniently ignored events in England in 2015/16 where the Tory Party government introduced a “super duper” computer system (cost in excess of £155m) which failed to deliver resulting in many farmers being denied legitimate claims for support payments until well after the end of June deadline
They also failed to draw attention to the appalling performance of the Tory run UK Department for Environment Food & Rural Affairs (Defra) which retained responsibility until recently, for the CAP and farming support payments. Over a number of years Defra repeatedly failed to implement the Single Payment Scheme (missing the June deadline) for payments to farmers. This resulted in the imposition of dis-allowance penalties. Cumulative total at March 31 2015: £642m.
For briefing purposes I have set out in this article a brief history of the EU Common Agricultural Policy which continues to reward inefficiency and graft at the expense of the consumer
Farming subsidies within the EU
The Common Agricultural Policy (CAP) is an inefficient and costly farming policy, in existence since the signing of the 1957 Treaty of Rome.
Whilst the concept of a common policy was laudable, without a means of accurately measuring income and expenditure it was doomed to fail since the public would be required to bear the expense of any excess funding of farming.
In 2003, the European Court of Auditors recommended (later endorsed by the Council of Ministers) that a feasibility study should be undertaken using a uniform approach across the EU. This would entail a collection of information covering all households where at least one member derived some entrepreneurial income from farming. The information gathered by “Eurostat” would be termed “Income of the Agricultural Households Sector” (IAHS)
Authorising the measures recommended by the European Court of Auditors, the Council of Ministers were acutely aware that an annual spend in excess of £10billion annually on agricultural support was unsustainable in the long term.
But, as is the case in many EU policies the project lapsed in 2007 and the EU is still “whistling in the dark” as regards accurate income and expenditure information. perhaps it is the fear of the light that worries the EU agricultural policymakers and their statisticians.
A study of the statistical information gathered however revealed that far from being a disadvantaged sector of society, EU farm households as a group have relatively high incomes compared to the rest of society and are of even higher wealth.
While no doubt some farm families suffer from occasional low incomes, and rather fewer from persistent low incomes, targeting support at them could produce a very different pattern of benefits from what we see at present, where the larger farms still command the vast majority of public spending.
But, greater transparency in pursuit of a more efficient public policy could result in substantial private losses to these high-income farmers.
Taking the argument a step further, in Member States where effective social welfare nets exist to help alleviate poverty, and this must apply most if not all, a clearer picture of the low income problem in agriculture brought about by improved household statistics might well trigger questions over why income support via the CAP is needed at all. Perhaps that is the spectre that the EU agricultural policy community is trying to avoid.
But the EU changed nothing. Direct payments to farmers, introduced after the 1992 MacSharry reforms to compensate for the lowering of commodity support prices remain in place.
The scale of payments is mind boggling. In excess of 50% of farm business income is attributable to financial subsidy through the EU.
However, as compensation for the decoupling policy change that took place nearly two decades ago, its rationale has well passed its sell-by date. Tax-payers seem to be getting very little in return for what is, in effect, an income subsidy. It is very hard to justify either in terms of market failure or equity.
The EU is equivocal about what will happen when the next CAP reform takes place in 2013. While a recent (Dec. 2009) discussion paper on the CAP mentions the need to provide a safety net for farmers against volatile market conditions and to prevent land abandonment, it seems clear that the SFP will not survive in its present form.
2012: EU fails to grasp the nettle – Maintenance of direct payments To farmers from 2013 – Abstracts from the policy documents
“The Communication identifies crucial challenges, above all the need for EU agriculture to provide public goods. However, only limited changes to the CAP are proposed. Rather than making a determined move towards targeted measures, direct payments will continue forming the backbone of the support regime.”
The CAP and the opaque and complex protection policies are not justified by what they deliver – mostly to the benefit of the food industry rather than farmers, consumers or the environment. In 2009 sugar and dairy processing companies were once again among the largest recipients of European farm subsidies.
CAP funding has also been managed and distributed in an opaque way and distributed unfairly between farmers, with considerable sums also going to the biggest farms, food processing corporations, banks and other companies (see Annex 1 below).
The CAP is often seen as an overly bureaucratic fund and this has not helped to give agriculture funding and farming a good name among the European public and politicians.
The CAP is generally perceived as a huge sum of money that eats up the majority of the EU budget.
CAP subsidies are also bitterly opposed by developing countries which are pushed by Europe not to protect their own agricultural sectors. Therefore these policies are seen as lacking legitimacy by many.
So, no change. The inefficient and costly EU agricultural policies remain in place until at least 2020!!!
Annex 1 – Consumers, farmers and the environment lose out: Farming in the EU in Figures
About one quarter of the CAP goes to big business and industry, including:
* Nestlé (confectionery)
* Haribo Germany, sweet maker
* Groupe Doux in France (a chicken food processor that doesn’t actually raise chickens).
* Arids Roma in Spain that makes road construction materials for road-building, paid for the by the Rural Development Fund.
* Ligabue, an Italian catering company that produces dairy and creamer sachets for travellers onboard air-planes and cruise ships
In 2003, half of farms in the EU received less than 1250 euro per year whist 1650 of the largest farms were getting more than 300 000 euro per year. From 1995 till 2005 the share of agricultural value in the food supply chain dropped from 31% to 24%.
Preliminary figures for the following years show a further decrease in the share returning to farmers, against a constant increase of profits by processors and retailers Between 1975 and 2000, the European farm labour force dropped from 13 million to 7 million.
Agriculture is currently one of the three most hazardous industries (the other two are mining and construction)
Only 7.6% percent of farms in the European Union are managed by people under 35. And more than half of land holdings are run by farmers over the age of 50.
Existing measures to support young farmers are clearly not effective.
80% of farmers are expected to lose their livelihoods as farming intensifies in the new EU member states (Central and Eastern Europe) directly as a result of the Common Agricultural Policy
Fifty per cent of European wildlife species depend on farmland and the damage to key habitats has been severe – accelerated by the emphasis on mono-cultures, mechanisation and specialisation leading to the loss of mixed farms and the enlargement of fields across Europe.
The new member states include areas of important biodiversity for Europe but no special measures to ensure that this is protected under the CAP were taken during accession talks
Support for EU intensive farming that allows cheap meat and dairy has led to over consumption of high fat food in an increasingly affluent EU. Furthermore, food
companies’ aggressive marketing strategies, including using celebrities, have played a significant role in promoting unhealthy food.
As in other parts of the world, obesity and diet-related diseases are an increasing problem in the EU
8 November 2013: Subsidy Payments to Farmers in Scotland – A row has broken out over the distribution of European subsidies for the farming sector in Scotland.
The Tory/LibDem coalition government announced that payments through the common agricultural policy (CAP) would be spread across the UK. But NFU Scotland and the Scottish government said the extra money, known as convergence uplift, should have been entirely directed to Scotland.
Scottish ministers claimed farmers north of the border would be deprived of hundreds of millions of euros in subsidies that were “rightfully theirs”, adding that the only reason the UK qualified for the uplift was because of Scotland’s low payments under the current system.
The coalition government’s decision means that farmers in England, Northern Ireland, Wales and Scotland will receive the same proportion of the CAP budget over the next seven years.
Rural Affairs Secretary Richard Lochhead described Westminister’s decision to share out the pot across the UK as “a disgrace”.
“I do not know how UK ministers will be able to look Scottish farmers in the eye after this outrageous decision that amounts to pocketing Scotland’s farm payments,” he said. I am aghast that Mr Carmichael the new secretary of state for Scotland can welcome the UK government’s decision to give Scotland the lowest farm payments in the whole of Europe and the UK. If Scotland had been a member state in our own right during those negotiations, we would have benefited from a one billion euro uplift. We have been denied that uplift and now we are even being denied up to 230 million euro uplift that the UK gets because of Scotland.”
NFU Scotland said farmers had been dealt “a bitter blow” by failing to win an immediate boost in European cash.
Scottish Conservative rural affairs spokesman Alex Ferguson said he was disappointed that all the extra convergence money did not go to Scotland.
Scottish Labour rural affairs spokeswoman Claire Baker said: “I am disappointed that Scotland has not received an immediate uplift as called for on a cross-party basis by MSPs.
20 March 2015: English – Online farm payment system to English farmers abandoned after ‘performance problems – But Scots, Irish and Welsh Farmers are financed within the EU time constraints
The Basic Payment Scheme (BPS) is the European Union’s biggest rural payments subsidy scheme for the farming industry.
A multi-million pound government IT system to process EU subsidy payments for farmers in England has been largely abandoned after “performance problems”. Farmers say they have struggled with the £154m website for months. Defra made the decision to “blend” new and existing forms and processes “to ensure that everyone who wants to make a claim this year can do so”, the chief executive added.
Farmers will now be asked to submit Basic Payment Scheme claims on paper forms. RPA staff will then input the data on to the system. A digital “mapping tool” to measure farmland boundaries has aslo been replaced with paper maps and forms.
One farmer said “I usually leave it to the last minute with the paper forms because they only take about three hours to complete, but so far I have spent three days working on the online version and I am only halfway through it. You have to enter what you’re growing in each field and a code for each crop. But we don’t have all the codes. It is just lack of information really, there is little or no information and the people on the switchboard when you ask the helpline are as much in the dark as we are.
Also talking to Farming Today, Guy Smith, from the National Farmers Union, said he had found the mapping programme “beyond comprehension. Our patience is worn really thin now and if we think that they’ve launched this again half baked, not ready to go, without proper back-up we will be complaining in the strongest terms.”
NFU president Meurig Raymond said: “The NFU has encouraged our members to register onto the new system in good faith, but we have been let down time and time again. We know that some farmers have already spent hundreds of pounds on agents’ fees and this is an unacceptable situation.”
Brian Glick, editor in chief of Computer Weekly, said: “The system hasn’t been permanently abandoned, it’s an embarrassment rather than a failure.”
14 July 2015 Revealed – huge cost of the maladministration of the previous CAP regime by the UK Department for Environment Food & Rural Affairs (Defra) and also the ever increasing cost of resolving IT problems that blighted this year’s BPS application
Defra has paid out more than £600 million in EU dis-allowance finances over the past eight years as a result of its disastrous implementation of the previous Common Agricultural Policy. Also revealed the cost to the UK taxpayer, or at least part of it, of the botched attempt to introduce an online only application for the new Basic Payment Scheme.
Defra was also forced to write off £5 million as a result of the switch to a paper-based system this spring.But this pales into relative insignificance against the vast cost to the taxpayer of previous failures to implement the Single Payment Scheme properly. The total cumulative value of dis-allowance penalties recognised in the Department’s financial statements March 31 2015 is £642m.
29 January 2016: Action to accelerate pace of implementing new CAP.
Rural Affairs Secretary Richard Lochhead has given an update on progress making payments under the new Common Agricultural Policy (CAP).
In a meeting with industry representatives, Mr Lochhead confirmed that over 5,000 farmers and crofters have now received the first instalment of their payment but due to the challenge of implementing the biggest CAP reform in a generation it was taking longer than expected to process applications – and EU rules expressly prohibit paying out on claims until they have been fully processed.
In response to the slower than expected progress, the Rural Affairs Secretary gave an update on the action being taken by the Scottish Government to pay farmers and crofters as quickly as possible.
He confirmed that as we near the end of January, first instalments have been paid to more than 5,000 farmers and crofters – almost 30 per cent of the 18,000 or so eligible claims – with more authorised payments expected to arrive in banks in the coming days.
Mr Lochhead said:
“This is the biggest CAP reform for a generation, and its implementation is tough – but we always knew this would be the case when we took the decisions with industry to tailor the policy to deliver the best possible outcomes for Scottish agriculture. In this transition year between the old CAP and the new CAP we are having to move to a whole new basis for allocating funds based on area of land, as well as implementing new greening measures and introducing a raft of new schemes to support agriculture.
“The Scottish Government has already made more than 5,000 payments – which is almost 30 per cent of the 18,000 or so eligible claims – with more initiated to arrive in the coming days. The first instalments we have paid are worth approximately 80 per cent of the value of Basic and Greening – much higher than the 70 per cent originally promised.
“I share the industry’s disappointment and frustration that we are not making faster progress, and I recognise the need to take further action to speed up payments. That is why I have instructed the deployment of additional staff to area offices and for applications to be processed seven days a week, and I will now ensure the Scottish Parliament and industry are updated more regularly on progress.
“I fully recognise the importance to farmers of receiving these payments as early as possible within the EU’s payment window of 1st December to June 30th and the Scottish Government is delivering, albeit at a slower pace than we’d all hoped.
“My officials have informed me the extreme complexity of the new CAP means claims are taking longer to process and EU regulations prevent us from issuing payments until all of the necessary checks have been completed. It is worth remembering that Scotland is well ahead of where other parts of the UK were at a similar stage in moving to area-based payments during the last CAP reform – and that was without having to implement greening and a new rural development programme at the same time.
“My officials are working as hard as possible to make as many first instalment payments as we can by the end of March, and the balance of payments soon after. The first instalments we have paid are worth approximately 80 per cent of the value of Basic and Greening – much higher than the 70 per cent originally promised.
Scotland’s Chief Agricultural Officer David Barnes added:
“This is the first time ever that Europe has simultaneously overhauled the direct payments system and rural development support – and EU rules now require Scotland’s CAP payments to be based on area rather than historic levels of production.
And – based on extensive consultation with industry – two Scotland-wide direct income support schemes are being replaced with six regionalised schemes, which add additional complexity this year, but will deliver long term benefits for Scottish agriculture.
We have also had a number of one-off first year tasks which will not have to be repeated in future years. For instance almost half a million fields have had to be allocated to one of the three new payment regions in this first year of the new CAP, alongside the processing of 21,000 Single Application Forms (SAF) as well as individually inspecting 1,300 farms.
While we’d all clearly hoped to be further ahead than we are, EU regulations prevent us from issuing payments until all of the necessary checks have been completed and we are doing everything we can to avoid claimants receiving incorrect payments or the loss of funding through EU dis-allowance that counterparts in other parts of the UK have faced in the past.
Despite the significant challenges we are facing, the Scottish Government has delivered at key stages of the process including registering for the new online system, opening to applications and starting payments. We continue to work flat out to process and pay as many claims as quickly as we possibly can. Of course, it is particularly challenging for the 1,300 farms which have been inspected as we must complete additional checks.”
The Scottish Government has paid first instalments worth 75 per cent of Basic and 90 per cent of Greening – much higher than the 70 per cent originally promised.
Administering the phased move to area-based payments for three payment regions, and with three coupled support schemes, means the Scottish Government has to issue around four million payment entitlements – covering around 400,000 fields – and inspect around 1,300 farms in addition to processing around 21,000 Single Application Forms. http://news.scotland.gov.uk/News/Farm-payments-update-220c.aspx
All benefit from annual grants through the CAP and they claim poverty
8 March 2016: Scottish government to speed up farmers’ payments
Scottish ministers have pledged to speed up payments to farmers. Up to £200m in national funds will be used to support thousands of farmers while Common Agricultural Policy (CAP) claims are being processed.
Payments have been affected by major issues with a £178m IT system set up in Scotland to administer the new CAP. But, by the beginning of March 10,164 first instalments worth about 80% of basic and greening payments had been made. That equates to about 56% of eligible claims.
The government pledge means that any farmers and crofters who have not yet received a first instalment by the end of March will automatically receive a cash advance worth 80% of their CAP claim. The move was announced by First Minister Nicola Sturgeon ahead of a meeting with NFU Scotland, who had warned of a “deepening cash crisis” facing farmers and crofters.
Ms Sturgeon said: “The transition to a new, more complex CAP that is affecting payment schedules right across Europe is happening as farmers and crofters are dealing with poor market prices and challenging weather conditions. We are less than half way through the payment window allowed by Europe, and the majority of Scottish producers – more than 10,000 – have already received a subsidy payment. However, payments are not being made as quickly as we would like. I very much recognise the cash flow issues facing Scottish agriculture, which underpins our £14bn food and drink industry. That is why the Scottish government has earmarked up to £200m of national funds so that any farmer or crofter who has not received an instalment by the end of March receive a nationally-funded payment from the Scottish government in April.”
Rural Affairs Secretary Richard Lochhead confirmed that the announcement would also enable Scottish Beef Scheme payments to be made in the middle of April, in line with previous years. He added: “We are continuing efforts to speed up progress, such as taking on extra staff, but given the current difficulties facing Scottish agriculture, the Scottish government will use national funds to ensure farmers and crofters will receive support, totalling hundreds of millions of pounds, in the coming weeks.”
NFU Scotland President Allan Bowie said: “The log jam has broken. For months, NFU Scotland has been looking for focused thinking and clear leadership from the Scottish government to resolve this farm payments crisis for the benefit of the whole rural economy. We welcome the first minister’s involvement and intervention and finally we have clear timelines drawn when all basic payment scheme claimants will receive the majority of their claims; when hill farmers and crofters will receive the majority of their Less Favoured Areas scheme money and beef payments have been promised in mid-April. That meets many of the demands that NFU Scotland has raised with Scottish government as a direct result of the cash flow crisis that has emerged in recent months. I praise the efforts of all those farmers, crofters and trade representatives who have taken time to brief politicians in the past few weeks. The flawed IT system to deliver CAP payments, funded by £180 million of taxpayers’ money, desperately needs to be addressed and investigated and that must happen in due course.
8 March 2016: Opposition parties call for a full and independent inquiry into delays to the support payments.
Calling the Scottish Government’s handling of the situation “shambolic” Tory leader Ruth Davidson tabled a motion, stating that farmers across the country have “lost trust” in the ability of Mr Lochhead to deliver the funding before the end of the financial year.
Scottish Labour’s spokeswoman for environmental justice, Sarah Boyack, said the Scottish government’s record over farm payments was “one of calamity, chaos and complacency. This is a real scandal, affecting real people and the minister just wrings his hands and complains that it is all very complicated. I’ve already asked him what representations he has made to Europe to speed things up and received no reply.Of equal importance is what the position is likely to be next year?”
Scottish Liberal Democrat rural affairs spokesman Tavish Scott said: “These payments are four months late. They could and should have been made in January or February or this month. But instead the delays have created financial chaos in the Scottish rural economy. This must now be the last rites for the Scottish government’s £178m computer that has utterly failed to deliver.” http://www.bbc.co.uk/news/uk-scotland-scotland-politics-35758263
The SNP accused its opponents of playing politics with the issue. SNP MSP Angus MacDonald said: “It is quite spectacular hypocrisy from the Tories to try and score political points over farm support – when their own Farming Minister is set on seeing the support abolished in its entirety by dragging Scotland out of the EU. The truth is that the Tory Government has refused to give our farming communities any information about the future of the support payments they’ll receive if we’re out of Europe – the Tories in Scotland should come clean on their own Farming Minister’s plans.”
Basic Payment EU (Farmers) Rules
Under European Commission rules, the Scottish government must make payments between 1 December of the scheme year and 30 June the following year.
Gentlemen Farmers & NFU Members Scottish Tory and Lib/Dem MSP’s
Alex Johnstone – NE Scotland
Alex Ferguson – Galloway & West Dumfries
John Scott – Ayr
Jamie McGrigor – Highland’s & Islands
Jim Hume – South Scotland
Tavish Scott – N.F.U. member only
Ownership of a 400 Hectacre farm would attract a £50,000 per annum basic farm subsidy