Date lodged: 16 May 2016
To ask the Scottish Government for what reason it is charging interest on the difference if a claimant’s common agricultural policy Basic Payment Scheme payment is less than the sum received under the emergency National Basic Payment Support Scheme; what the rate of interest is, and for what reason it considers this amount appropriate.
Answered by: Fergus Ewing 24 May 2016
The National Basic Payment Support Scheme (NBPSS) has been designed so that a farmer or crofter’s Basic Payment 2015 total should be more than the sum paid by NBPSS. This lets the Scottish Government deduct the NBPSS payment from their Basic Payment 2015 total and pay the remainder into their bank account.
Under EU state aid rules the Scottish Government is required to calculate a notional amount of interest, equivalent to the cost of borrowing at approximately market rates, which constitutes a ‘de minimis’ state aid to the recipient. No recipient will actually pay any interest provided they adhere to the terms and conditions to which they agreed when accepting the offer of a NBPSS payment.
Under those terms and conditions, in the unlikely event that a claimant’s Basic Payment 2015 total is less than the NBPSS they have been paid then they will have to repay the difference between the two amounts. Provided they do so within seven days, no interest will be charged, but the terms and conditions stated that if any balance were to be still outstanding after seven days then interest would be charged on it at 4.24 per cent. This is in line with standard Scottish Government procedure for money owed.
However, it is expected that very few if any farmers and crofters will find themselves in this position, because the NBPSS payments were set with a safety margin of 20 per cent so as to ensure that they can be covered by the basic payment once that has been finalised.