As the new £27 million Farming Investment Fund is rolled out it is vital that farmers and land managers fully assess the opportunities available and how funding towards equipment and infrastructure can help their businesses.

As we know, the aim of the new Agriculture Act is centred around cutting carbon emissions, creating more space for biodiversity, enhancing wildlife habitat, and improving animal welfare; whilst maintaining a sustainable and profitable farming industry for the long-term. As direct payments to farmers are reduced during the next seven years there will be a plethora of grants made available to support the agricultural industry with the primary aim of reducing costs and improving profitability through increasing productivity.

The Farming Investment Fund aims to do just that. The fund is split into two parts, the Farming Equipment and Technology Fund (FETF) and the Farming Transformation Fund (FTF). FETF is based closely on the previously seen Countryside Productivity Small Grant Scheme; however, this year, new items have been added to the list which now also include areas such as forestry equipment. The FETF provides capital grants from £2,000 up to a maximum of £25,000 from a list of 120 individual items, including everything from direct drills and robotic silage pushers to self-propelled forwarders and crop storage sensors. The application window for the FETF closes on 7th of January 2022 which doesn’t leave much time for applicants to consider the options available and is understandable that the festive period might get in the way somewhat.

The FTF, dare I say, has a similar feel to what we experienced under the LEADER and RDPE funding programme. The FTF is aimed at much larger scale investments and projects to help businesses improve business productivity, overall profitability, and environmental sustainability. The minimum grant under the FTF has been set at £35,000, up to a maximum of £500,000, covering up to 40% of the eligible costs of the specific project which means a minimum project spend would be £87,500.

The FTF has three focused themes

The first theme; Water Management, will provide funding for arable and horticultural businesses to improve the efficiency of their water use and will focus on the effective use of water for irrigation and to help secure water supplies for crops.

The second theme; Improving Farm Productivity, will provide grants for larger scale projects to improve efficiency through farm modernisation by adopting innovative technology and practices.

The third theme; Adding Value, will help to purchase equipment for the processing of agricultural products, providing farmers with a great opportunity to add value to farm produce with the aim of improving their bottom line.  The Water Management theme is now open for applications with a final deadline of 30 June 2022. The Improving Farm Productivity and Adding Value themes are expected to open in the next few weeks.

As farmers see the first reduction in the Basic Payment this December, it’s important that ways to make businesses more efficient are fully explored. Accessing productivity grants will without doubt help to do this by improving business efficiency, however, it’s also important not to let the ‘tail wag the dog’. A new grant can often be a very appealing thing, a bit like a shiny object is to a Magpie, however, it is important to carefully assess how a specific investment project may benefit the business before committing to it. Farmers and land managers must only look at making such an investment into new equipment if it’s well thought through. It is vital that new opportunities are fully costed, the advantages and disadvantages are assessed, and it forms part of the longer-term plan for the business.

The transition period will offer many opportunities for farmers to mitigate against falling direct payments, but without a thorough understanding of the impact these opportunities may have on a business there is a risk that their overall benefits are not fully realised.

Speak to our Rural team on 0333 920 2220 or view/download our Farming Investment Fund update.