LFASS update

The future of the Less Favoured Area Support Scheme (LFASS) has been outlined by Rural Secretary Fergus Ewing.

Because of compulsory changes to the scheme by the European Commission, it is proposed that hill farmers and crofters in Scotland’s most fragile and remote areas will receive a parachute payment in 2018 of 80% of their LFASS payment rate.  Changes are required as EU Rural Development Regulations do not permit the continuation of the scheme unchanged after this year.

Speaking ahead of next week’s hill farming summit, Mr Ewing said:

“LFASS is vital for our rural economy and remote communities, providing support to more than‎ 11,000 farmers and crofters. That is why we continued with the scheme, even when the UK Government stopped it. And it is why we are continuing with LFASS until 2018 to provide stability of funding and support for our farmers and crofters.  

“However, EU rules do not allow us to continue with LFASS unchanged from next year. That is why, having looked at ‎all options, and to provide as much financial stability as possible during these uncertain times, I intend to introduce parachute payments for 2018.  I am also actively consulting with stakeholders on how farmers and crofters in the Less Favourable Areas can access other support available under existing SRDP schemes, along with supporting priorities such as new entrants.

“Unfortunately I am unable to give farmers and crofters assurance on LFASS from 2019 as, despite repeated requests, the UK Government has still not guaranteed that the scheme will be funded in 2019. I have therefore once again written to the UK Government seeking assurance over LFASS 2019 and also the £190 million in external convergence uplift as a matter of urgency.

“It is only fair that we receive swift confirmation on LFASS 2019 and that the convergence monies are repatriated to Scotland, in full, so that we can provide certainty to our farmers and crofters, and afford to pay them a rate that ensure the economic viability and sustainability of these remote areas.”

Neil McCorkindale, Chairman, Scottish Beef Association said:

“The Scottish Beef Association fully supports the parachute payment proposal for LFASS which is the best option available in the short term. We also acknowledge the continuous engaging of Scottish Government with the industry stakeholding groups in reaching difficult decisions in such an uncertain time. It is encouraging to know that the Cabinet Secretary recognises the importance of those support payments to livestock producers at this time of year, and we welcome the clarity this provides.”

Background 

The Less Favoured Area Support Scheme (LFASS) is part of the £1.3 billion Scottish Rural Development Programme (SRDP) 2014-2020. 

The European rules do not permit SG to continue with LFASS unchanged after 2017.  They foresee a change from LFASS to an Areas Facing Natural Constraint (ANC) scheme and area designation from 2018, or for those that do not make the transition to ANC in 2018, they may continue with their current schemes paying up to 80% of payments in 2018.

Degressivity will also have to be introduced, where above a set an area threshold payments will reduce.  The changes to LFASS will require to be submitted to, and approved by, the European Commission before they are finalised.

More information about SRDP 2014-2020 can be found on the Scottish Government website: http://www.gov.scot/Topics/farmingrural/SRDP