Subsidy Trading Tops £12.5m - Press & Journal

by Joe Watson, Press & Journal

Farm subsidies worth more than £12.5million and covering in excess of 163,000 hectares have been traded by Scottish farmers.

The figures - revealed in a parliamentary answer by Environment and Rural Development Ross Finnie to former Moray MSP Richard Lochhead - also show that up to March 2 there had been 838 individual businesses authorised to acquire the rights to the subsidy entitlements disposed of by 1,252 farmers and organisations.

The disclosure of the figures for the first time gives an indication of the scale of subsidy trading since the single farm payment entitlements were given to farmers in 2005 as part of the Common Agricultural Policy reforms.

But the statistics only present part of the story and the way they have been released has been branded meaningless by those trading them as the value shown in the executive's figures does not reflect the market price.

Generally entitlements over the last two years have traded between 2.5 to three times their annual value. Conservative estimates would indicate that the entitlement market may be worth at least £25-£30million, much of which will have been intra-farm and estate trading.

The figures to March 2 showed that in total there had been 2,761.37ha/u of set-aside and 163,596.54ha/u of standard entitlement transferred between registered farming businesses.

Mr Finnie acknowledges that 22 of the businesses involved in acquiring entitlements had what he termed "correspondence addresses" outside Scotland. One of these is outside the UK.

The minister also revealed in a separate answer to former Banff and Buchan MSP Stewart Stevenson an increase in the number of businesses holding entitlements outwith Scotland.

In 2005 there were 71 farm businesses elsewhere in the UK receiving Scottish subsidy payments, but last year the figure increased to 87.

The number of overseas "farm businesses" getting Scottish cash remains at eight - two each in Canada, Australia and Ireland, as well as one in France and the United States, all of whom shared between them about £100,000 in subsidies.

Mr Finnie said that put into context the trade in entitlements involved 8.3% of all the farm businesses holding them. Acquisitions were made by 4.1% of all businesses.

He added: "In volume terms, 3.8% of all entitlements have been traded and in value terms, the trading represents 3% of the scheme's annual expenditure."

The trading of entitlements has proved a lucrative new market for auctioneers such as Aberdeen and Northern Marts, Wallets at Castle Douglas, Dingwall and Highland Marts plus a few consultancy firms including Hayes, McCubbin, Macfarlane and the Buccleuch Group.

Aberdeen and Northern has been the market leader.

But the trader said the way the figures had been presented was meaningless as while they were broken down into years they did not show the actual number of entitlements transferred in 2006, only those on the executive's database up to March 2 of that year and instead lumped all transfers after that date into this year's trading.

He also questioned the data on the overseas traders, saying that while one of his clients was abroad the entitlement acquired was going to his estate in Sutherland.

"The owner is a foreigner, yes, but he is bringing that on to his estate so that will mean money being spent on the estate. That will mean investment in it, on housing and accommodation and probably, too, his sporting interests in game and deer stalking, both of which are growth areas.

"The executive is only telling part of the story, not the whole story. Quite how Richard Lochhead could make any sense of this response I am not sure. If this is the type of information given out by civil servants, then it's not helpful in the slightest."

The trader estimated that the market in entitlements last year would have involved about £4million at least.

"That is just the crude value of the entitlement, too. You have to remember that last year entitlements traded were publicly making 2.5 to three times their value. This year it is more around three times and some at 3.5."

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