Debt grows at record rate for farmers

DEBT levels in Scotland’s farming sector have reached a record high, with the amount owed to banks increasing by almost £180million in the past year.

At the end of May 2016, a total of £2.2billion was owed – a rise of £177million on the previous year, and the seventh year in a row that debt levels have increased.

Farms also have an estimated £1.4billion of liabilities from hire purchases, lease arrangements and money borrowed from family members and other sources, according to Scotland’s Chief Statistician.

The figures, which show bank farm debt is the highest since records began in 1972, come after problems with a new IT system caused delays getting European subsidies to farmers. As of August 24, there were 1,061 of 18,479 eligible businesses that had not received payment under the Common Agricultural Policy (CAP) scheme.

Conservative rural affairs spokesman Peter Chapman said that farmers ‘have been let down badly by the SNP. The rural economy was starved of hundreds of millions of pounds thanks to its mismanagement of vital CAP payments.’

Liberal Democrat rural affairs spokesman Mike Rumbles said: ‘The SNP have singularly failed to give farmers the confidence they need that these problems will be addressed and payments will come out on time next year.’

The figures were released at the same time as the announcement of the latest round of Scottish Government and EU funding to help create and support new farming businesses. This will see 35 businesses share more than £1.8million, taking the total spent on the Young Farmers and New Entrants Start-up Schemes to more than £7million, which has helped 140 farms across the country.