What rural grants are on the horizon for my business?

The farming industry is going through a lot of change at the moment, with the phasing out of the BPS and the introduction of ELMS (Environmental Land Management Schemes) under the Agricultural Bill..

There is still much that is unknown about how future grants and environmental schemes will be structured over the coming years, how and who will be able to access the grants, and it can be difficult to keep track of what is coming up, what is closing down, and how to make the best use of the schemes that are available. Here’s a summary of what is on the cards.

The Farming Investment Fund is a new grant that will open in Autumn 2021 and will enable farmers and, also farming contractors for the first time, to apply for funding to invest in equipment and technology to help improve productivity. The grant will be split into two sections.

The Farming Equipment and Technology Fund will provide smaller grants to enable farmers to buy equipment, technology and small infrastructure. This is likely to be very similar to the Countryside Productivity Small Grants scheme that closed last year and involved an online application choosing items from a set list and at a set grant fund price.

The Farming Transformation Fund will award grants for larger and more complicated projects that improve productivity and create employment opportunities on farms. Eligible investments are likely to include robotic or automated technology and applications, on-farm water storage infrastructure and equipment for storing, sorting or processing products. It remains to be seen whether this will extend to supporting diversification projects like the previous RDPE grants did, or whether it will remain specifically focused on improving agricultural performance.

Beyond the farming investment fund, there are also several environmental land management schemes being piloted, that will be launched from 2022 onwards.

The Sustainable Farming Incentive will launch in 2022 and will initially be available to BPS recipients, however by 2024 Defra intend to open this up to all farmers. The scheme will reward environmentally sustainable land management with actions grouped into packages that enable farmers to choose what is best suited to their land. The more complex Local Nature Recovery and Landscape Recovery schemes are also being piloted but will not launch until 2024.

In the meantime, existing multi-annual and capital grant Countryside Stewardship Schemes remain open for applications up to 2024. Crucially, any CSS agreement starting after 2021 will be able to transfer to a new scheme if that was more advantageous once the new schemes become available.

At a more industry structure level, 2022 will also see the launch of the Lump Sum Exit Scheme whereby farmers wishing to leave the industry will be offered the chance to take a lump sum payment. The consultation period with farmers ended on 11th August, and rules are due to be set out in the later part of the year ahead of a launch in 2022.

Also in 2022, Defra are set to launch a New Entrant scheme. Further information is to be provided in November 2021, but is expected to set out how to attract new blood to the industry.

There is a lot of new schemes on the horizon, and our message is to start talking to your professional advisors now about the future of your business so that, when the grant schemes launch, you are ready to benefit from them.   

Time to maximise marginal arable and grassland with Woodland Grants?

Tom Arthey, director at property and farm business consultants Arthey Associates, is advising clients to think seriously about the performance of their marginal land, and whether low-output areas could be better served with some of the ‘green’ grant opportunities, specifically with the newly launched England Woodland Creation Offer Scheme (EWCO).

The new EWCO Scheme is open to new applicants, with a £15.9 million pot in the first year, whilst existing or recently applied for Woodland Creation and Maintenance Grant scheme participants can switch their agreement to the new format.

Woodland of varied types and sizes are supported with EWCO Scheme, as well as greater financial incentives for the long-term maintenance of those sites – £200/hectare for 10 years.

“The benefit of this particular grant is also that it does not prejudice against a farm’s future inclusion in DEFRA’s Woodland Carbon Guarantee, a £50million scheme that aims to accelerate woodland planting to offset carbon-dioxide, thereby allowing you to earn an income for planting and maintaining woodland on areas of your farm that are arguably unviable and dragging overall farm performance down, as well as benefiting from carbon capture schemes and earn further income in this way.”

Tom continues: “We know that British farms can be a real asset to the environment, capturing carbon dioxide across a range of landscapes. At Arthey Associates we are encouraging our clients to seriously think about the new England Woodland Creation Offer Scheme and the Woodland Carbon Guarantee for those areas of the farm that it makes sense to do so.

“In a world where farming is being increasingly measured for its environmental impact, and with Environmental Land Management Scheme (ELMS) clearly signposting the direction that the government is taking, we think this Grant is a great opportunity for long term benefit to not only the environment but also your farm’s bottom line.”

As well as the maintenance payments, capital items up to a value of £8,500/hectare will be funded, with additional support for nature and species recovery, tree planting near watercourses, reduced flood risk, improved public access, planting close to settlements and improved water quality.

To discuss your options and for help with your application please contact Tom Arthey on 07748 295448 or tom@artheyassociates.co.uk

The Stewardship Scheme gamble – stick or switch?

The government launch of the “Pathway to Sustainable Farming” in December 2020 heralded the introduction of a new Environmental Land Management Scheme (ELMS) from 2021 onwards. It may therefore surprise some that the Countryside Stewardship Scheme remains largely unaltered – the window for new applications for the Countryside Stewardship Scheme opened in February, and farmers and land managers will notice that this is on much the same basis as recent years.

Whilst certain elements of the ELMS will be introduced later in 2021, and pilot projects launched across the UK, the main structure of environmental stewardship will remain on the same basis as before until 2024. Furthermore, those that have entered a Countryside Stewardship Scheme in recent years, or do so this year, will have those schemes honoured at the current payment rates until the end of their agreement.

Arthey Associates director, Tom Arthey, says: “Some may wonder whether it is best to wait and see what a new scheme format has to offer in the coming years, but is that a gamble worth taking? The current schemes give certainty on multi-year and capital-only options, which the government may not be in a position to match in the future.”

Tom Arthey, Arthey Associates director

Tom continues: “Added to that consideration is that some of those options may, in time, become a mandatory requirement of a future payment scheme anyhow, so wouldn’t it be worth getting the experience of implementing now whilst it is a paid-for option?”

The Countryside Stewardship Scheme covers a range of schemes – Mid Tier Stewardship, streamlined Wildlife Offers, Higher Tier Stewardship, CS Capital Items applications to support boundaries and hedgerow improvements, water quality and air quality improvements.  There are also woodland creation, maintenance and management grants available as well.

Mid-Tier Stewardship offers a number of arable, mixed farming and grassland multi-year options, on a very similar basis to past years. These can be supplemented by options for capital grants to support a range of field boundary improvements.

“Depending on the location of the farm, and whether it is in high priority area for water quality, capital grants can also be applied for to help prevent nitrates and pesticides leaching into water courses. The grants pay for equipment that can hep solve these issues, such as paying towards water storage tanks, renewing concrete yards where runoff would occur, covering yards used for cattle handling, silage and manure storage, sprayer washdown sheds, bunds and biofilters,” says Tom. Under this route, you need to request an application pack online by 30th June 2021 (earlier if in writing) and have submitted the application by 30th July 2021.

Wildlife Offers is a streamlined option to apply for a set package of multi-year options depending on the type of enterprise and location (arable or mixed, lowland or upland). This is on the same deadline timescales as Mid-Tier.

As before, Higher-Tier stewardship applications are open in areas targeted for Higher Tier stewardship options. Whilst many of the multi-year options and capital items are the same as for Mid-Tier, there are some additional habitat creation and management features that just apply to Higher Tier applicants. Application packs need to be requested by 31st March 2021, and applications need to be submitted by 30th April 2021.

If you are already in Mid or Higher tier, or you just want to look at capital items, then there is an option to apply under the CS Capital Items grant. Applications need to be in by 30th April, and some items may require Catchment Sensitive Farming Officer approval.

Woodland Creation grants can be applied for as standalone grants all year round, or as part of a Higher Tier application, along with woodland management options. Where farmers may be thinking of planting woodlands on their farm, this provides grant funding towards the planting and protection of the trees, and some of the woodland infrastructure.

In terms of other grant funding possibilities for farm productivity improvement, or to support rural diversification projects, the last round of the EU-funded rural development grants closed last year. We are still waiting for guidance from the Government on what any future grant schemes will support, what level of funding will be available, and on what basis.

In the meantime, there are a number of government and private charitable grants available currently to support community projects in rural areas, large-scale environmental and energy projects, and business continuity and resilience.

A new £10 million fund to drive private sector investment in nature was launched by the Government in February and aims to support community groups or the private business sector with up to £100,000 grants to help them develop nature projects to a point where they can attract private investment. This can include large scale habitat renewal schemes on farmland, as one example.

The National Innovation Centre for Rural Enterprise (NICRE) has launched a new funding round to improve rural business productivity and associated challenges. These offer £15,000 grants to projects looking at technologies that improve agricultural productivity. The projects must, however, be run in collaboration with a UK Higher Education Institution.

Tom finishes: “Whilst at the current time the majority of grant funds are directed to support environmental measures, it is anticipated that the Government will, in due course, announce some additional funding streams to support innovation and productivity improvement, as well as rural diversification enterprises. As and when these schemes are announced, we will provide further information.”

EXCITING OPPORTUNITY FOR PLANNER TO JOIN OUR EXPANDING TEAM AT PROPERTY & FARM BUSINESS CONSULTANTS IN NORTHAMPTONSHIRE

Arthey Associates are looking for a qualified Chartered Town Planner or Chartered Surveyor to join our team to help service our expansion in planning and development related work for agricultural and rural based businesses across Central and Eastern England.

Applicants should have particular experience of rural planning matters and be capable of managing planning applications for a number of uses, especially as part of diversification projects, as well as be able to provide strategic planning advice to clients based on a sound understanding of national and local planning policy. Experience in other areas of rural property consultancy is also beneficial, but not a prerequisite requirement of the applicant.        

The successful candidate will be self-motivated but capable of working within a small team to provide a timely and professional service for our client base, and have a desire to help grow the business. 

The position offers flexible working arrangements to fit in with current lifestyle, and could be on a full-time or part-time basis. Depending on the circumstances of the applicant, the role would suit either employed or self-employed persons, with an employed role attracting standard benefits. Salary or earnings will be dependent on the candidate’s level of experience and agreed basis of employment structure.

Whilst remote working will be possible, there will also be a requirement to work from our office in Oundle, Northamptonshire at least some of the time, as well as travel to client sites in the local area. 

Please apply to Gilly Wrathall gilly@artheyassociates.co.uk by 26th March 2021 with a covering letter and CV.

Further considerations for farm diversification

Following our popular ‘The Diversification Dilemma’ webinar earlier in the autumn, we are delighted that Gary Markham, director of farms and estates at Land Family Business, joined us earlier this week to talk through some of the key considerations for farms thinking of diversifying their businesses.

Gary opened the discussion saying: “Based on our client benchmarking, we know that on average 84% of our arable farming clients’ profit comes from the current BPS payments. Income from diversification has increased, whilst income from arable farming over the last three years has been fairly static.”

“It is clear,” he continued, “that with the Pathway to Sustainable Farming earlier this month, farms will need to think about finding additional sources of income to reduce that reliance on BPS contributions.”

Whilst this seems a daunting consideration for many and a time of huge change, at Arthey Associates we are clear that this is also a time of immense opportunity, when businesses take steps to diversify in the correct way.

“There are undoubtedly opportunities for our clients,” said Tom Arthey, director of Arthey Associates, “and it is great to see businesses thinking this way; however, it is really important to speak to experts like Gary and our team here to see what you need to consider when it comes to structuring your new enterprise.”

We would be delighted if you join us to watch Tom and Gary discuss farm diversification further on the video linked below – some of the key points are summarised below:

  • Diversification can have many guises, including trading or investment income, with several knock-on effects from a tax, and particularly inheritance tax, point of view.
  • Tax rates – 19% for companies, partnerships start at 20% but build up to 40% and even 45% – a huge consideration and implications on those different paths, so getting the right one for your structure is essential.
  • Renting buildings out is a very popular and straightforward diversification with redundant farm buildings being used for livery and holiday lets most popularly, but there are some interesting tax implications there.
  • Renewable energies are an opportunity too.
  • There are ways to build up value in your business and spread it out amongst the family through setting up a new company for your diversification with different family members as shareholders – succession planning is a huge part of the diversification process.
  • Sit down early and have succession discussions with your family to understand expectations and assumptions from everyone – the biggest contribution to a lack of profit in businesses is dysfunctional families.
  • Get in early with your plans, you can do things like gifting land within agriculture to help structure the taxation and manage inheritance tax.
  • Is the market there for what you are interested in doing? Market research is critical and be market led, not product driven. Speak to your accountants too, one that knows the family, and remember there may be grant funding that we can help you with too.

Arthey Associates can offer a full suite of services for those looking to diversify. We have the expertise to help you rationalise ideas and concepts, undertake market research, produce business plans and projections, put together applications for funding with lenders or via government grant schemes, obtain planning permission, assist with project management of the development, website building, marketing, PR and business administration from launch onwards.    

From growing cereals to welcoming breakfasting guests– arable farm diversifies into exclusive holiday cottages

Working with local independent property and farm business consultants, Arthey Associates, arable farmers J P and M Sharpley and Son, have recently launched three exclusive holiday cottages in Thornhaugh, Peterborough, near Stamford, making use of the Rural Development Programme for England (RDPE) Growth Programme grant to fund 40% of the cost of works and provide not only a diversified income stream but also support local businesses in the building, fitting and servicing of the cottages.

Peter Sharpley (left) and Tom Arthey (right) at Croft Farm Barn Holiday Lettings

Offering flexible accommodation for up to 18 guests across three properties (two of which can be connected) and marketed exclusively with Sykes Cottages, the 400 year old Croft Farm Barn Holiday Lettings are a local conservation project, with the application for the RDPE grant taking 18 months from the concept through to confirmation that the funding had been awarded in July 2019. The cottages were completed and welcomed their first guests in early October 2020.

Peter Sharpley said: “We are thrilled that with the RDPE grant, arranged by Arthey Associates, we have been able to not only bring life back to an old farm house at the centre of the village, but also that we are now making use of what were completely unused barns. Whilst providing us with a diversified income, the work that the grant allowed also provides ongoing work for local businesses such as cleaners and laundry services.”

Peter continued: “We are working to put together options for guests to pre-order goods from local farms and shops, whilst the furniture and fittings were mostly sourced locally, including all the glassware from Sinclairs of Stamford. Without the work that Arthey Associates put in to securing this grant for our project, including local market research, we would never have got this off the ground.”

Tom Arthey, director of Arthey Associates, said: “It is really pleasing to see a project like this finished and welcoming its first paying guests. In what has no doubt been a turbulent year, the Sharpley family have worked hard at keeping the project rolling and launching it to take advantage of a new generation of ‘staycationers’ whilst ensuring that the accommodation complies with the latest Covid-19 guidelines. To see a completely redundant set of buildings finished to such a high standard is a great example of the kind of diversification that farms should be looking to undertake to maximise existing and unused assets.”

Tom continued: “Arthey Associates are pleased to be working on a number of similar diversification projects, and whilst the RDPE Growth Programme funding route is no longer open to new applications at the current time, we  always look to make use of any grants that become available and fit with a clients project.”

Arthey Associates are farm business consultants based in Northamptonshire, offering a range of services to clients from the East Midlands and East Anglian regions, and indeed further afield. Their expertise includes property consultancy and planning, business planning and  bookkeeping, as well as community engagement, PR and marketing to ensure that new and existing businesses reach their end customer, whether that is business-to-business or direct to consumer.

If you would like a no obligation meeting to discuss diversifying your farm business or any of our services, please contact Tom Arthey on tom@artheyassociates.co.uk or 07748 295448 / 01832 270269

Webinar – The Diversification Dilemma

If you missed our webinar on ‘The Diversification Dilemma’ earlier this month, you can now view it in your own time by clicking on the video below.

The third in a series of webinars hosted by the East of England Agricultural Society, Tom covers:

  • Initial market research and feasibility
  • Project planning and funding opportunities
  • New planning rules
  • Marketing and publicity – the best channels

As always, Arthey Associates would be pleased to discuss any initial thoughts that you have on diversifying your enterprise. With a dedicated team of marketing and PR and business support advisors, we are ideally placed to support your business from the get-go.

To speak to one of the team today please call 01832 270269, or email tom@artheyassociates.co.uk

Your last opportunity to benefit from Countryside Productivity Small Grant Scheme

DEFRA have recently announced the opening of the third round of their Countryside Productivity Small Grant Scheme, with a £25 million pot to help farmers boost their productivity through business efficiencies, whilst helping the environment.

Arthey Associates director, Tom Arthey, says: “As the third round of this grant scheme becomes available, we are advising any of our clients who are looking to support increased productivity on their farm to see if any of their plans include equipment that qualifies for the funding, as this is likely to be the last opportunity under the current EU-based funding regime.

Under the scheme, farmers can apply for grants on equipment between £3,000 and £12,000, from livestock monitoring cameras to precision technology – anything that either boosts your farm’s efficiency and productivity, or supports the environment, can be applied for. The deadline for applications is 4th November 2020.

DEFRA also advises that farmers who have had previously successful grant applications in either of the previous two rounds of funding, can still apply for different pieces of kit in this final round, in what they say will encourage farmers to ‘streamline other elements of their business’ and ‘start the move towards farming more sustainably.’

Tom continues: “Whilst DEFRA have insisted that powers included in the new Agriculture Bill will allow the government to provide financial support to farmers to invest in equipment, infrastructure and technology, their focus is on this support aligning with their ‘public money for public goods’ and environmental focus, and farmers should definitely bear this in mind as they assess their future plans for their business and whether this final round of the Small Grant Scheme can benefit them.”

Should you require any advice in understanding what equipment can be grant funded or would like us to assist in making the application, please do not hesitate to contact Tom on 01832 270 269 or 07748 295 448, or email tom@artheyassociates.co.uk.

Overwintering cattle on fodder beet in Norfolk

Earlier this year, before the Covid-19 pandemic hit, Arthey Associates’ Amy Woolliscroft was pleased to attend a joint meeting of the AHDB and Stabiliser Cattle Company in East Harling, Norfolk, discovering the cost and health benefits of outwintering suckler cows on strip-grazed fodder beet with Richard and Sue Evans’ herd of 133 Stabiliser cattle.

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Richard said: “We’ve all got to drive down the costs of keeping cows. To survive in the industry we have to do two things: add value and keep numbers as high as possible to keep costs down.” Richard introduced Stabiliser genetics to his suckler herd in 2006 and hasn’t looked back. The herd is performance recorded and performance motivated, selecting mostly for calf vigour and mothering ability, as well as 400 day weight. Richard continued: “We are not loyal to Stabilisers but haven’t found anything that does the job better on our land.”

The right land is essential to make this form of strip-grazing work, and with the sandy soils of Norfolk, Richard is able to outwinter all of his Stabiliser females together, with heifer calves remaining on their mothers until four weeks before they are due to calve again. Richard explained: “This means that these young females cost us nothing to keep, whilst we have seen no detrimental effects to the subsequent calf with daily liveweight gain of male calves maintaining a steady 1.35kg/day.” Richard has fine-tuned the field stocking rate as the strip grazing moves across the field slowly, whilst adjacent grassland is essential as the cows are introduced to the system to avoid health complaints.

The benefits of keeping all 133 females together also include reducing labour and fuel costs, as Richard is able to open the next strip of grazing in a 20 minute window twice a day, leaving time for managing the output of the farm, the store bull calves. There is also a handling system within the outdoor system, with cows having to walk through it to get from the grassland to the fodder beet when they are fed; Richard finds that this reduces stress on the cattle when it is time for veterinary checks or vaccinations.

Amy said: “It was a pleasure to visit Richard and his family, and see the benefits of his system. It is certainly hard to argue against the results that the enterprise is producing, with a tight nine week calving period, and all bull calves sold away as stores and finished at 12-14 months.”

If anyone would like any more information from the event, please contact Amy on amy@artheyassociates.co.uk

What does end of ‘greening’ requirements mean for you?

Farmers and landowners in England are likely to welcome the news from DEFRA this week that greening requirements adopted from the European Commission surrounding the three-crop diversification rule and ecological focus areas (EFA)  will be scrapped as the government transitions from the current Basic Payment Scheme (BPS) to the new Environmental Land Management (ELM) Scheme, but what will this mean for you?

  • Reduced administrative burden as no need to comply with EU greening policy in 2021 scheme year
  • No effect on the overall payment received by each farmer as the 30% associated with greening will instead be reallocated to farmers’ entitlements under BPS
  • This is a first phase of the seven-year transition to the new ELM scheme, rewarding farmers with ‘public money for public goods’, and due to start being introduced fully in 2024

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  • Farmers can continue to apply to Countryside Stewardship (CS) schemes until the ELM scheme is rolled out
  • Particularly beneficial to contract farmers, where the crop diversification rule, and its impact on crop rotations within each holding, has had impractical outcomes on their ability to grow crops efficiently
  • Farms with limited storage will no longer need to find space to store three or more crops

Arthey Associates’ Director Tom Arthey said: “We are pleased to provide ongoing advice and support for our farming clients on their current and future BPS and CS schemes, and we know that this cut of the so called ‘greening’ will help to simplify the administrative requirements and environmental management on farms. We also welcome the permanent removal of the three-crop rule which, as had already been shown last winter, was too prescriptive for many farmers.”

Tom continued: “However, there is still an alarming lack of detail on what the new ELM scheme will look like, and, like our agronomy colleagues, we would advise that farmers don’t rush into making wholesale changes to their farming systems until more details emerge.”

“Environment Secretary, George Eustice, has said that they will be setting out more detail in the autumn on how they intend to ensure a smooth transition for farmers. The plans are for a “fairer agricultural system”, which will reward farmers for the hard work that they do to protect the environment, but on what basis that will be is still largely unknown.”

Arthey Associates are farm business consultants based in Northamptonshire, offering a range of services to clients locally and nationwide. Their expertise ranges from land agency to cash-flow forecasting, and business modelling to bookkeeping, as well as community engagement, PR and marketing to ensure that new and existing businesses reach their end customer, whether that is business-to-business or direct to consumer.

If you would like a no obligation meeting to discuss the impact of ELM Scheme on your business or any of our services, please contact Tom Arthey on tom@artheyassociates.co.uk or 07748 295448 / 01832 270269