2. To ask the Scottish Government whether it will provide an update on the information technology system for common agricultural policy payments. (S5O-00500)

During my statement to members on 13 September, I committed to reporting back to Parliament in January 2017 on the progress that has been made.

In 2017, the Scottish Government will need to deliver the balance of payments for the loan scheme as well as the remaining balance for the coupled beef and sheep schemes and the vital less favoured areas support scheme. I understand that no timeline has been provided for the delivery of those payments. Can the Cabinet secretary clarify when the payments of the balance will begin and when they will be completed?

Claudia Beamish refers to the national loan scheme that we have introduced, and my understanding is that nearly 13,000 farmers have chosen to avail themselves of that scheme, which injected £260 million into the rural economy around the first fortnight of November. That is a good thing, and I think that most farmers—at least those outside the chamber—have welcomed it. [

Laughter

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On the specific point that Claudia Beamish makes, just last week I met the chief executive of the IT contractors CGI. Obviously, we are pressing for timeous delivery of all payments by the deadline of June next year. We expect to have repaid the financial transaction element that finances the loan repayments by the end of this financial year or thereabouts.

I refer members to my entry in the register of members’ interests. [

Applause

.]

The Cabinet secretary will be aware that there have been significant issues relating to transferring entitlements, with many farmers unable to receive payment for many months. By what date will the IT system be able to process entitlement transfers?

Obviously, there are a great many different cases, and they are all triggered at different times because farms are not sold on 1 January; they are sold or transferred throughout the year. There is no cohort of transactions called “transfer of entitlements” that fall to be dealt with on any particular date. It would be ludicrous to suggest that there was. However, in the spirit of Christmas, I am happy to write to the member to confirm that we shall be tackling all payments as swiftly as we can.

The issue is a serious one for those farmers who are involved in transfers of entitlements. As the member knows, there are complexities, but we all want to ensure that these matters are processed as quickly as possible.

I draw members’ intention to my registered agricultural holding of a massive 3 acres.

What measures are being taken to address the costs of the common agricultural policy futures system and to ensure that CAP payments are put on a better footing in future?

I say in reply to the smallholder that we have been working to bear down on the costs of the CAP futures system. From November, we expect to see savings of more than 10 per cent on the cost of the contractor, with the supplier taking the risk on delivery of the savings. In addition, as a result of the negotiations with the contractor that I have overseen, there will be a new penalty and service credit regime in place that will incentivise timely delivery and impose financial penalties where those timetables are not met. I hope that that commercial discipline will help us deliver efficaciously our obligations in respect of the CAP futures system.