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Current and Future Farm Funding
22 March 2018

With the publishing of the Government’s consultation document “Health and Harmony: the future for food, farming and the environment in a Green Brexit”, it seems clear that the ambition for farm funding post-Brexit is almost certainly a move away from direct payments.  Although the exact model to be followed is as yet unclear, it seems likely to be “public money for public good”.  Timescales are also uncertain, with payments as they exist currently guaranteed to 2019 and thereafter there being an “agricultural transition” phase to last a number of years as a new policy is introduced.  Clearly huge change is anticipated, so what can we expect?

The “Agricultural Transition” Phase

Direct payments will continue, however they will not be unchanged and reductions are likely to be applied.  The consultation seeks views on these reductions but models proposed could be:

i. Apply progressive reductions with higher percentages applied to amounts in higher payments bands as with income tax, e.g.

Basic Payment: £0 – 25,000 Reduction Amount: no reduction
Basic Payment: £25,000 – 30,000 Reduction Amount: 5% reduction
Basic Payment: £30,000 – 40,000 Reduction Amount: 10% reduction
Basic Payment: £40,000 – 50,000 Reduction Amount: 15% reduction
Higher amounts Higher reductions
Basic Payment: £200,000+ Reduction Amount: 75% reduction

ii. Apply a cap to the largest payments, e.g. over £100,000.

iii. A variation of the two above.

Beyond year 1, direct payments will face further reductions and be totally phased out by the end of the transition period, although when that may be is not yet known.  Two models are proposed for how these payments are to be made during the “agricultural transition”:

  • A continuation of the current scheme requirements, albeit with some simplification.
  • Completely unlink payments from land and base them on the value of the payments during an historic reference period.  Effectively, this would capitalise the entitlements and farmers would be paid a lump sum to either reinvest or quit the sector completely.  Rules would be implemented to prevent businesses splitting into smaller entities to avoid the payment caps under the scenarios examined above.

The same cash total funding for the farming sector has been promised until the end of the current parliament, with the estimated £150 million savings made by the reductions above diverted to pilot new environmental land management schemes and other funds to help the industry prepare.  Payments after the transition phase will be replaced by a system of public money for public goods, principally environmentally focussed.

Given the forthcoming changes, what funding opportunities are currently available to farmers to help prepare and diversify?

Rural Development Programme for England – Growth Programme


Grant: Business Development
What is it for? Helping rural businesses grow including farmers diversifying into non-agricultural activity. Local priorities will dictate which projects will be supported.
How much will it fund? 40% of the eligible project costs. Exact amount is dependent upon which Local Enterprise Area the applicant falls in.  Generally around £35,000 – £200,000.
Deadline: An Expression of Interest form must be submitted by 31st May 2018.

Grant: Food Processing
What is it for? Supporting food and drink, agricultural and horticultural product processing businesses and farmers looking to diversify into this sector to grow and improve efficiency. 
How much will it fund? 40% of the eligible project costs. Exact amount is dependent upon which Local Enterprise Area the applicant falls in.  Generally a minimum £35,000 with upper limits widely variable.
Deadline: An Expression of Interest form must be submitted by 31st May 2018.

Grant: Rural Tourism Infrastructure
What is it for? Supporting business and projects with the capital expenditure required to develop tourism infrastructure.  Farmers looking to diversify into these areas are eligible.
How much will it fund? 40% of the eligible project costs. Exact amount is dependent upon which Local Enterprise Area the applicant falls in.  Generally a minimum £35,000 with an upper limit of around £170,000 for commercial projects or no upper limit for non-commercial projects.
Deadline: An Expression of Interest form must be submitted by 31st May 2018.

Rural Development Programme for England – Countryside Productivity Scheme

Grant: Improving Farm Productivity
What is it for? Improving on farm productivity through use of robotic equipment and increased use of renewable energy produced on farm as well as more efficient use of livestock slurries and digestate.
How much will it fund? 40% of the eligible project costs. Subject to a minimum £35,000 grant, i.e. £87,500 total eligible project costs and maximum normally of £1 million.
Deadline: Applications to be submitted by 3rd December 2018.

Grant: Water Resource Management
What is it for? Improving efficient use of water for irrigation and to secure water supplies for crop irrigation through the construction of on farm reservoirs.
How much will it fund? 40% of the eligible project costs. Subject to a minimum £35,000 grant, i.e. £87,500 total eligible project costs and maximum normally of £1 million
Deadline: Applications to be submitted by 29th June 2018.

Grant: Adding Value to Agri-food
What is it for? Improving the processing of primary agricultural products to shorten supply chains and deliver benefits to primary producers.
How much will it fund? 40% of the eligible project costs. Subject to a minimum £35,000 grant, i.e. £87,500 total eligible project costs.  The maximum amount will depend on the raw and end product.
Deadline: Expression of Interest Form to be submitted by 29th June 2018.

LEADER

Grant: Improving Farm Productivity
What is it for?  Dependent upon the local priorities of the Local Action Group (LAG) of the area the project falls in but broadly all projects must support one or more of the 6 LEADER priorities:

  • support micro and small businesses and farm diversification
  • boost rural tourism
  • increase farm productivity
  • increase forestry productivity
  • provide rural services
  • provide cultural and heritage activities

How much will it fund? Typically 40% of the eligible project costs. Minimum and maximum amounts will be dependent upon the LAG.  For example, Beds and Hunts Claylands has a minimum £10,000 and maximum typically £80,000.
Deadline: Open.

For further information about current or future farm funding, please get in touch with Jim Cribb, Assistant Rural Surveyor.

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