First Minister Nicola Sturgeon confirmed the Scottish Government will use up to £200 million of national funds to provide cash support while Basic Payments claims are being processed.
It means any farmer or crofter who has not received an instalment by the end of March will receive a nationally-funded payment from the Scottish Government in April.
The move will also allow Scottish Beef Scheme payments to be made in the middle of April, in line with previous years.
The First Minister said that while 10,000 producers had already received their subsidy, payments were not being made ‘as quickly as we would like’, adding she recognised the severe cash flow issues facing the sector.
NFU Scotland president Allan Bowie said: “The log jam has broken. For months, NFU Scotland has been looking for focussed thinking and clear leadership from Scottish Government to resolve this farm payments crisis for the benefit of the whole rural economy.
“We welcome the First Minister’s involvement and intervention and finally we have clear timelines drawn when all basic payment scheme claimants will receive the majority of their claims; when hill farmers and crofters will receive the majority of their Less Favoured Areas scheme money and beef payments have been promised in mid-April.”
The payments debacle has been blamed on the Scottish Government’s flawed IT system which was set up to deliver CAP payments and was funded by £180 million of taxpayers’ money.
Mr Bowie said the union was concerned about the implications for the 2016 scheme, which is expected to open for electronic applications in a few days’ time.
He added: “Right now, let’s focus on getting this vital money into circulation, fill the £300 million hole that has been created in Scotland’s rural economy and let’s get Scotland’s farmers and crofters back to the job of producing food and doing business again with all those trades that rely on a thriving agricultural sector.”
Earlier this week Rural Affairs Secretary Richard Lochhead announced national funds would be used to ensure hill farmers and crofters in Scotland’s most fragile and remote rural areas who rely on Less Favoured Area Support Scheme (LFASS) funding would receive a payment in March as usual.
Mr Lochhead added: “Europe’s deadline for making direct payments is June 30, and the majority of Scottish farmers and crofters have now received a first instalment worth about 80 per cent of their basic and greening claim.
“We are continuing efforts to speed up progress, such as taking on extra staff, but given the current difficulties facing Scottish agriculture the Scottish Government will use national funds to ensure farmers and crofters will receive support, totalling hundreds of millions of pounds, in the coming weeks.”