SCOTGOV is once again offering interest-free 'loans' to hill and upland farmers and crofters, as an advance on their Less Favoured Areas Support Scheme payments.

Eligible farmers and crofters will be offered up to 95% of their allocated Common Agricultural Policy LFASS payment from January. A similar scheme in 2018 delivered payments worth more than £52 million to more than 8400 hill farmers and crofters.

Rural economy secretary Fergus Ewing said: “I have continually said that we should support those who need support the most. Even though we are on track to make LFASS payments this Spring, I want to make sure those farming on marginal land can go into the New Year with as much financial security as possible.

“Our rural economy is on the front line of the potential impacts of Brexit, with remote and rural areas likely to be hit the hardest if we have to leave the EU and lose tariff and barrier-free access to trade. This offer to around 10,000 farmers and crofters will therefore offer a degree of clarity and certainty," said Mr Ewing.

“As with the recent National Basic Payment Support Scheme, which has invested more than £340 million into the rural economy since October, it is important for farmers and crofters to understand that no one would have to return this payment in the event of a ‘no deal’ Brexit. This is their money and they are entitled to it.

“With Scotland closer to being removed from the EU against our wishes than ever before, I would encourage any eligible hill farmer or crofter to return their loan acceptance as soon as possible to enable us to get your payment out as quickly as possible,” he added.

Loan offers will be issued in batches when claim eligibility can be confirmed. The initial batch of loan offers will be made to around 10,000 farmers and crofters, and ScotGov will continue to make additional loan offers as claim eligibility is confirmed.

Payments under the LFASS loan scheme will be made from mid-January to anyone who returns their loan offer acceptance by January 17, 2020.

The loan scheme has been designed so the sum paid is less than the full amount due from CAP LFASS 2019 – the loan will be automatically deducted from the LFASS payment when it is fully processed and claimants will then receive the balance payment.

NFU Scotland director of Policy Jonnie Hall commented: “While we await confirmation from Scottish Government, our working assumption is that the latest national LFASS loan scheme will be based on 95% of 80% – given that the LFASS 2019 budget has to be set at 80% of LFASS 2018.

“Nevertheless, we welcome the move by Scottish Government to get a significant amount of funding out to those farming and crofting on Scotland’s more challenged land and the positive effect that will have for farmers and crofters.

“We encourage all those receiving loan offers in the first tranche, some 10,000 or so, to opt in by January 17, 2020. Given the on-going uncertainties and the challenges of mid-winter cash flows, the intent to make loan payments as soon as possible thereafter is good news," said Mr Hall.

“We continue to work with Scottish Government to ensure that the first tranche of the convergence dividend, some £90 million, is also on track to be delivered by the end of March 2020.”