The FINANCIAL -- Farming businesses hit by delays in receiving their new Basic Payments Scheme (BPS) payments are being offered a fee free loan to bridge the gap thanks to RBS and NatWest.
The loan will be available to farming customers who may experience a delay in receiving the EU’s new annual support payment due to an extended application deadline, according to RBS.
While government officials are working to get payments out as speedily as possible, there is a possibility that some farmers could experience a degree of delay compared to previous payments.
Ian Burrow, Head of Agriculture and Renewable Energy at NatWest and RBS, said: “We’ve been working closely with industry bodies who have warned that farmers could face a delay in receiving their BPS payment compared to when they have historically received their Single Farm Payment.
“The payment window is from 1st December to 30th June, and while many usually receive payment at the beginning of the window, customers in theory could receive their payment six months later than usual.
“Our current expectation is that the delay will not be this long but it is prudent for businesses to plan for possibly a two to three month delay.
“We know that many farmers are dependent on this money and will be hit hard by any delays as in many cases they have set up payments to coincide with receiving their support payment early in the payment window.
“We wanted to let our customer’s know early that we will support them through any cash flow challenges that they may face as part of the implementation of BPS.”
This is the first year that BPS has been in place, replacing the Single Payment Scheme from January 2015.
The bridging loan, available to existing customers, will allow farming businesses to borrow a significant proportion of the amount they expect to receive from the BPS until the official payment comes through.
Ian added: “We are dedicated to supporting the agricultural industry and would urge anyone who is worried or likely to be impacted to come and speak with us as soon as possible.
“Loan agreements will be put in place from mid September with the money being available in the customer’s account from the first week of December.”
Fears over an extended wait stem from the extension of the BPS application process to the middle of June (from May), following a number of issues with implementing the new support regime - including mapping technology.
The on-going uncertainty over the regionalisation of Wales gives further concern as to delays in payments being received timeously in the region.
NFU President Meurig Raymond said: “We have been working closely with the financial industry to ensure they remain aware of the financial issues farmers are facing. RBS and NatWest have acted quickly to offer these fee-free bridging loans and we welcome their efforts.
“On BPS, we remain focused, working with government to ensure timely payments to our farmer members.”