A flawed IT system, which delayed £300m worth of payments to Scottish farmers and crofters, has created a rural crisis and put the Scottish Government on a collision course with Europe, farmers claim.

Speaking in Brussels yesterday National Farmers Union Scotland (NFUS) Vice President Rob Livesey said completion of all payments before the June deadline was unlikely and so it was probable that Scotland would be fined by EU auditors for implementation breaches.

Mr Livesey called on Scottish ministers to have an open and frank dialogue with the European Commission about their problems, so part payment to all applicants could be made at the earliest opportunity.

He said currently only £100 million out of a basic Common Agriculture Policy (CAP) scheme pot of £400 million had been delivered.

Mr Livesey said: "For the sake of the whole Scottish rural economy – farmers, crofters and all those suppliers they do business with – this support needs to be paid out as soon as possible so that the wheels can start turning again.

“I urge the Scottish Government to again engage with the commission on the difficulties it is encountering due to the flawed IT system it has installed. Previous approaches have failed but, at that time, no-one knew just how bad the delay in payments would be and the Scottish Government's expectation was that the majority of people would have been paid at the start of the year. " That clearly had not happened.

He said Scottish farmers looked to the commission to lift the threat of fining the Scottish Government for audit breaches so payments could be made without a claim being fully processed.

“There is a genuine crisis within the rural sector at the moment; it's not just about farmers but the many businesses along the supply chain who are struggling with outstanding debts."

Last month the Scottish Government announced that farmers hit by delays to EU payments were to be offered loans from a new £20m fund.