FARM BUSINESS IMPROVEMENT SCHEME – CAPITAL SCHEME TIER 1 TRANCHE
Tuesday, 26 December, 2017
Commodity Watch written by Aileen Lawson, Senior Policy Officer
The Farm Business Improvement Scheme – Capital Tier 1 Tranche 2 will open for applications on 4 January 2018 for 4 weeks closing on 2 February 2018. The explanatory booklet and list of items available for grant aid are now available online and the UFU would advise farmers interested in applying to the scheme to use the next couple of weeks to consider the requirements and start getting the information together to allow them to apply in the New Year.
A budget of around £7.5 million has been made available and the eligibility criteria are the same as were in place for tier 1 tranche 1. Tier 1 is designed to support farm sustainability and is for projects costing £5,000 - £30,000 of eligible costs based on reference pricing. The grant rate is up to 40% of eligible costs with the maximum grant available for a farm business set at £12,000 over Tranche 1 and 2.
Past experiences would show that many farmers leave the submission of grant applications to the last minute with the majority often coming in the last day. Due to the requirement to obtain a letter from the bank and to complete the ‘Making it Safer’ online assessment, this isn’t a sensible approach as potential applicants need to give themselves time to get these elements organised, uploaded and sent in. Farmers who had applied in tranche 1 must get the bank letter reissued (dated after 11 December) and the ‘Making it Safer’ assessment must be completed again (dated after 1 December). This is to take account of any changes in circumstances since the first tranche.
There is a template for the bank letter available online, however some banks may use an alternative format and details on this can be found online. While some banks will issue these letters over the counter, others may take longer; therefore if applying for the scheme, farmers should approach their banks as soon as possible to ensure they have the letter available to them in time for the deadline.
Eligible applications will be scored against the same criteria used in tranche 1; item theme band (40 marks), value for money (39 marks), online submission (11 marks, age of applicant (5 marks), educational attainment (5 marks).
While farmers can submit an application in paper, it is advisable to use the online system if at all possible. As 11 marks are available for those who submit online therefore it would be much better for applicants to use this method. Another advantage of using the online system is that it will allow all applications to be assessed quicker therefore potentially speeding up the issuing of Letters of Offer.
The UFU is encouraging farmers to think carefully about the items they require before applying to the scheme and to consider the ‘banding’ of items. Farmers should only apply for items that they intend to purchase and that they really need. There are some additional items in this tranche and all the items have been given a new code and prices adjusted, therefore farmers must ensure that they are using the list of items published for tranche 2 of the scheme. If an applicant is successful and accepts their Letter of Offer but later does not purchase all the items applied for, penalties could be imposed and could also affect future applications to the scheme as per EU rules. Each item listed in the scheme has been assessed against core themes for the Rural Development Programme and banded accordingly with band 1 being the highest. These bands will be used as a selection criterion and it is important to note that the lowest band applied for will determine the mark to be awarded against this criterion.
The ‘Value for Money’ criterion worth up to 39 marks, proved to be the most significant criterion in tranche 1. Marks are awarded on a pro rata basis for those applicants that choose to reduce the grant sought up to a maximum of 20 percent below the maximum grant rate listed for the item(s). The ‘Value for Money’ reduction will apply across all items included in the application.
The maximum grant available per farm business over the lifetime of the NIRDP 2014-20 is £12,000 for Tier 1. If you were successful and claimed under tranche 1 of Tier 1 you can still apply to tranche 2 as long as the total grant support received under both tranches does not exceed £12,000. If you are unsure about how much grant you can apply for in tranche 2, contact the scheme administrators Countryside Services Ltd on 0845 0267535 for assistance.
Farmers who have applied to Tier 2 can still apply to tier 1 tranche 2 whilst awaiting a decision however, if both applications are successful they will not be allowed to accept both Letters of Offer.
There is lots of useful information and guidance on the DAERA website and the UFU would advise members to read and consider it all carefully before submitting applications for this scheme.