Member states struggling to deliver 2015 Basic Payment Scheme (BPS) payments have been granted additional breathing space before incurring hefty EU fines.
EU Agriculture Commissioner Phil Hogan has confirmed his intention to effectively extended the June 30 EU payment deadline for member states to October 15.
Under normal rules payments made after June 30 would incur reductions in the rate of reimbursement from the EU from June 30 to October 15.
Typically post-June 30 payments would incur a fine of 10 per cent on those made in July, 25 per cent for August payments, increasing to 45 per cent for September.
The derogation, which can only be applied at Member State level, means payments can continue after 30 June without the application of any reductions for late payments.
Mr Hogan stressed this was ’an exceptional measure’, which reflected the difficulties that some paying agencies have experienced with the first year of BPS payments.
He said: "It represents an unprecedented level of flexibility on the part of the European Commission and, based on the current levels of payments, could yield a multi-million euro saving for those Member States/regions, and potentially their farmers, which will not have made their payments by 30 June."
But he warned paying agencies ’this derogation must not be used as an excuse to slow down the rate of payments’ and urged them to prioritise the issuing of all outstanding payments, with a view to maximising the level of payments made by June 30.
Of the UK regions, Scotland is most likely to benefit from this extra flexibility, having struggled to deliver payments through the course of the payment window.
NFU Scotland chief executive Scott Walker said the move was ’good news for the Scottish taxpayer’, as it would significantly lessen the risk of a hefty fine.
He said: "The recent Audit Scotland report estimated that failure to deliver payments by the end of June could have cost the Scottish Government between £40 million and £125 million.
“However, any deadline shift must not be used as an excuse by Scottish Government in delaying the payment of outstanding 2015 monies any further or hold back progress with the 2016 scheme.
With many millions of pounds still outstanding, we will be looking to the Scottish Government to have made significant inroads into filling the substantial hole that remains in the Scottish rural economy by the time the Royal Highland Show starts on 23 June."
NFU vice president Guy Smith said the NFU understood there were now only about 3,500 2015 BPS bridging top up payments left to pay in England.
He said: "We would be appalled if RPA used this as an excuse to delay these payments. However, we don’t see why they would as it’s a relatively small number and they seem to making progress through them."