The deadline for paying the remainder of last year’s Basic Payment Scheme monies has been extended by more than three months to October 15.
European agriculture commissioner, Phil Hogan, has confirmed that member states who fail to make all direct support payments by June 30 will not be penalised.
Member states will now have until October 15 to make payments, after which point they will incur fines from the European Commission.
Mr Hogan said the extension had been granted in response to difficulties by a number of member states and regions in getting the money out on time.
He said it was “an exceptional measure” which must not be used as an excuse to slow down the rate of payments.
The news has been welcomed by the Scottish Government who were at threat of fines of up to £125million if they failed to pay everything out by June 30.
Rural Economy Secretary, Fergus Ewing, said: “This flexibility is welcome, but it will not detract from my determination to make full payments to as many Scottish farmers as possible by June 30. This remains my absolute priority.”
“Today’s announcement by the EU Commission reflects the challenges being faced by countries across Europe in implementing this Cap reform and making payments, and reduces the potential for financial penalties being imposed on administrations.”
NFU Scotland said the deadline extension was good news for the Scottish taxpayer, but warned government not to use it as an excuse to slow down payments.
The union’s chief executive, Scott Walker, said: “With many millions of pounds still outstanding, we will be looking to the Scottish Government to have made significant inroads into filling the substantial hole that remains in the Scottish rural economy by the time the Royal Highland Show starts on June 23.”
Scottish MEP Ian Duncan welcomed the flexibility shown by the European Commission and called for lessons to be learned from the late payments fiasco.
He said: “A public inquiry is urgently required into what has gone so very badly wrong for so very long.”
North-east MSP Peter Chapman, who is the Tory rural affairs spokesman, said: “The Scottish Government has been let off the hook by this decision, which thankfully will mean that taxpayers will not have to foot the bill for the failure to process these vital payments on time.”
He said government must continue to work urgently to ensure all payments are issued in full as soon as possible.
Liberal Democrat MSP Mike Rumbles agreed and said late farm payments had “blown a hole” in farmers’ abilities to plan their finances effectively.
He said: “We need to ensure that funds get out of the door and into bank accounts before the end of June.”