National Less Favoured Support Scheme 2019 (NLFASS 19)
Date published: 13 December, 2019
Q. Why is there need for a loan scheme?
A. The Scottish Government is committed to supporting farmers and crofters. With the ongoing uncertainties around Brexit, we are offering eligible farmers and crofters a loan of up to 95% of their 2019 scheme entitlement, with payments beginning in January 2020. The scheme aims to address concerns around the impact of Brexit and maintain vital cash flow within the rural economy.
Q. Why are you calling it a loan when it's an advance on what I am due?
A. There are specific EU rules around advance payments which limit CAP-funded early payments by amount and timing.
Therefore, we are making the offer of loans from domestic funding which is not constrained by EU rules. These are more generous and can be timed to suit Scotland’s farming businesses’ needs.
Q. How much am I entitled to receive?
A. The majority of businesses will be offered a loan of 95% of their anticipated 2019 CAP LFASS entitlement. Others will be offered less on a sliding scale, based on similar factors to those used in the 2018 scheme. In some cases we have also deducted outstanding loan balances and scheme overpayments.
Q. When will farmers and crofters receive their NLFASS19 loan offer letter?
A. We will be sending out NLFASS offer letters in batches, the first offers will start to be sent from the 13 December 2019 and will continue to be issued as claim eligibility is confirmed. Anyone concerned about not receiving your offer letter should contact their local RPID Area Office or email nationalLFASSScheme@gov.scot.
Q. How do farmers and crofters accept their loan offer?
A. In line with the approach taken to the NLFASS 2018 loan scheme, the NLFASS 2019 scheme will be an “opt in” scheme. This means that those wishing to apply for a loan will need to reply promptly once the Scottish Government has written to them, indicating that they wish to apply. The loan offer letter provides clear guidance to support those wishing to apply for a loan.
Q. What happens if anyone misses the application deadline?
A. They will still be able to enter the loan scheme, we will work to process loan payment as quickly as possible but cannot guarantee when they might be paid. To avoid this, we encourage everyone to respond as soon as possible.
Q. What if farmers or crofters don’t want a loan?
A. If anyone does not wish to accept the offer they do not need to take any action.
Q. How many farmers and crofters are eligible?
A. The full extent of eligible businesses is still being confirmed, but we expect this to be around the same level as the 2018 loan scheme.
Q. Will anyone not be eligible for a loan?
A. It is likely that a small number of applicants will not be in a position to be offered a loan. This was the case for the 2018 LFASS loan scheme too.
Q. If farmers and crofters use an agent to manage their applications for funding – will they be able to accept loan offers on behalf of farmers and crofters?
A. The loan offer is being made to the business, in the majority of cases it will be a member of the business who signs and accepts the conditions of the loan.
If a business member is not able to sign the opt-in form, then it can be signed by someone who holds the required authority from the business member(s) and accepts the responsibility for receiving the loan.
The existing mandates held by RPID do not extend to loan payments.
Q. When will farmers and crofters receive their loan payments?
A. We expect to start to make loan payments in January to those who apply before the deadline included in their letter.
Q. How will loans be repaid?
A. The value of loans will be deducted from the claimant's 2019 LFASS payment once that has been made. This is the approach taken to the LFASS 2018 scheme and the BPS loan schemes.
Q. Will you charge interest?
A. Where loans are fully recovered, Scottish Government will meet interest costs in compliance with state aid rules. Further information will be provided in the loan offer letter.
Q. What is State Aid?
A. State Aid refers to the use of national resources to support and incentivise businesses. There are many different State Aid regulations. The regulation which applies in this instance Commission Regulation (EU) No 1408/2013 which is the Agricultural de minimis Regulation.
Q. What is Agricultural de minimis?
A. Agricultural de minimis allows farmers to receive €20,000 over a three-year fiscal rolling period. For the National Loan Schemes it is the interest foregone (calculated at market rates) and not the actual loan amount that is the State aid element.
Q. How do the State Aid rules affect me?
A. By accepting the funding, you are declaring that you have not exceeded the de minimis threshold. Failure to do so could result in the funding being recovered with interest by the European Commission.
Q. How do I know the amount of State Aid benefit I have had from the various CAP loan schemes?
A. We will include an estimate on the total amount of state aid de minimis payments you have received from the national loan schemes in your LFASS loan offer letter.
| Crofting Cattle Improvement Scheme (Bull Hire Scheme) | Sea Eagle Scheme | Clyde and Avon Valley Tree Planting Scheme |
|---|---|---|
| Rural Priorities Outcome Plan | AECS Farm Environmental Assessment Payment | Dairy Farmer Island Concession Scheme |
| New Entrants and Others 2013 | Weather Aid Scheme 2013 | BVD Check Payments |
| Fallen Stock Fund | Fox Control Scheme | Biofuels Programme |
| Resource Efficient Scotland | Weather Impact Support Scheme for Westray Farmers | 2015 Cash Flow Loan Scheme |
| 2015 National LFASS Scheme | 2016 National LFASS Scheme | 201 National LFASS Scheme |
| 2018 National LFASS Scheme | 2015 National BPS Scheme | 2016 National BPS Scheme |
| 2017 National BPS Scheme | 2018 National BPS Scheme | 2019 National BPS Scheme |
This list is not exhaustive and other schemes may also be considered as de minimis payments.
Q. What if a loan turns out to be more than the value of the claimant's eventual LFASS 2019 payment?
A. We have designed this scheme so that your 2019 LFASS payment should be more the NLFASS paid to you. We will deduct the NLFASS payment and pay the remainder of your LFASS payment to your bank account. The deduction will constitute a repayment of the NLFASS.
However, if your LFASS 2019 total is less than the NLFASS you have been paid then you will have to repay the difference between the two amounts. If you repay the balance within seven days, no interest will be charged. Interest at 4.10 per cent per annum on the difference will be charged from seven days after your LFASS payment is made.
Q. Will you allow for more time if a loan repayment can’t be made within 7 days?
A. State Aid regulations require us to charge interest on any outstanding balance. However it is very unlikely that this will be an issue for you as the maximum payment you can receive as a loan through NLFASS is 95% of your LFASS payment, we will automatically deduct the NLFASS payment from your LFASS payment.
Q. Will farmers and crofters who have been inspected receive a loan offer?
A. Yes, so long as they are eligible for an LFASS 2019 payment.
Q. When will LFASS 2019 payments be made?
A. We are making good progress in our handling of LFASS 2019 scheme payments, and are on track to commence payments in April 2020. However with the ongoing uncertainties of Brexit and the possibility of a “No Deal” we are launching the loan scheme in December to guarantee farmers and crofters get access to their money during uncertain times.
Q. What happens if a farmer or crofter changes their mind?
A. If you still have your offer letter then please return the opt in slip to us. If you require a copy of your loan offer letter then please contact us as soon as possible by contacting your local RPID Area Office or emailing nationalLFASSScheme@gov.scot.
Q. Where can I get help and support?
A. Customers can contact their local RPID Area Office or email nationalLFASSScheme@gov.scot.