Farmers would be “unwise to assume” this year’s subsidy payment will arrive on time, claims a leading farm business consultant.
Speaking during a breakfast briefing at the Oxford Farming Conference, Richard King, of Andersons, urged farmers and crofters to prepare themselves for delayed payments.
“Farmers would be unwise to assume that Basic Payment Scheme cheques will arrive in bank accounts from December 1, 2015, so there are some cash flow issues for the industry in the future,” said Mr King.
He said the buzz phrase was no longer “sustainable intensification” but instead “resilience”.
“The key to being resilient in the long-term is to make some profit,” said Mr King.
“If you are not in a position to get a premium price and you are just producing for the commodity market, the key is having a low cost of production particularly as markets have fallen away.
“Those that have created high-production systems, have tended to be exposed over the last year or so.”
In November, Press and Journal Farming revealed industry leaders were concerned the first round of direct supports under the new Cap would be made as late as April 2016.
Minutes from a meeting of the government’s Cap stakeholder group, held in July, state: “2015 will not be a normal year and unlikely that we will meet the usual 90+% payments in Dec 2015. SG has been making plans to reduce risk of delays but risks remain”.
The Scottish Government has always maintained that its timetable for Cap implementation and payment delivery is “both realistic and achievable”.
However, at the Oxford Farming Conference this week farm minister Richard Lochhead admitted Scotland’s Cap reform was “far from perfect and is in danger of drowning in complexity and losing its focus”.