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Key farm income decision expected Key farm income decision unveiled
(about 4 hours later)
Scotland's 20,000 farmers are waiting anxiously for the new SNP government's decision on farm subsidies. Scotland's farmers are to lose some of their subsidies following a government decision - but not by as much as they had first feared.
Rural Affairs Secretary Richard Lochhead will announce to parliament whether 20% of farm payments will be taken for rural development projects. Rural Affairs Secretary Richard Lochhead set the rate at which cash will be diverted to a general fund at 5%, rising to 9% by 2010.
Farmers have urged for it to kept to the minimum of 5%, claiming some farms may go out of business otherwise. Some farmers feared the rate announced in parliament may have been up to 20%.
Supporters argue that the rural economy needs funds for projects such as holiday cottages and wildlife reserves. However, Mr Lochhead also announced an extra £70m for the farm support programme over the next seven years.
Under EU agricultural reforms, aid is paid in the form of a single payment to each farm, amounting to £400m a year, rather than the previous array of subsidies. He set out a further £10m initiative to attract new blood into the farming industry.
Part of the payment is withheld for environmental and other development schemes and ministers had to decide by 1 June whether this cut should be as much as 20%. What we now have is the largest investment programme in history for rural Scotland Richard Lochhead MSPRural Development Secretary
The Scottish government has remained tight-lipped on the deal, but a spokesman said an "agreed position" had been reached. Under EU agricultural reforms, aid is paid in the form of a single payment to each farm, amounting to a total of £400m a year, rather than the previous array of subsidies.
Farmers had urged for the rate to be kept to the minimum of 5%, claiming some farms may go out of business otherwise, but supporters argue that the rural economy needs funds for forestry, environmental and community projects.
Mr Lochhead said: "What we now have is the largest investment programme in history for rural Scotland which will benefit everyone.
"This will ensure the programme will increase competitiveness in agriculture and forestry, enhance the environment and support rural communities."