15 March 2002

Farm grants:

dont take them

for granted

Applying for grants these days requires stamina,

perseverance and professionalism. Philip Dunn, agribusiness

consultant with Brown & Co, gave David Cousins some

pointers on how to do the job right

ASK a farmer about grants and youll get one of two reactions. They may give you a wide smile and relate a heart-warming story of sympathetic civil servants and fat cheques plonking on to the doormat.

More likely, theyll roll their eyes, clench their fists and tell you a tale of wasted time and effort on a grant that never materialised.

So why do some farmers manage to get grants while others, equally deserving, fail dismally and swear never to try again?

One person who should know the answer is Philip Dunn, agribusiness consultant at Brown & Cos Brigg office in Lincs. He says a significant proportion of his time is now spent applying for grants on behalf of farmers, most of them for schemes under the England Rural Development Plan.

Some of the most common questions he has to answer are:

&#8226 What sources of funding are available?

Mr Dunn concedes that information about grants available takes some finding because there isnt a comprehensive and up-to-date listing of all the aid available.

Your best bet is probably to go to a professional adviser, he says. But beware that some grants can change on almost a monthly basis, so check that they have recent experience

The major grants appropriate to agriculture are now grouped within the England Rural Development Programme. Contact your DEFRA regional service centre for details about those. (See box for numbers).

Redundant farm building conversion grants are still available through most regional development agencies, though one or two have ceased offering them.

Local tourist authorities sometimes allocate funds, as do county or regional authorities. But because these dont tend to be publicised, you should contact your local and county council to see what they have on offer, advises Mr Dunn.

The Farm Business Advice Services (FBAS) farm appraisal service (a Business Link initiative) is not a grant as such, but potentially very useful for any farmer thinking of diversifying. A professional adviser will come to your farm and give up to three days free advice (five days if youve had cattle culled through F&M) on the financial health of your business and whether theres scope for expansion, co-operation or diversification.

This advice is on offer to anyone for who spends at least 75% of their time working on the core farm business. Ring the Small Business Service (See box for numbers), of which the FBAS is part, to get eligibility details.

The final source of financial assistance comes in the form of one days free planning advice that can be obtained by applying via your local DEFRA office. Although this is not a grant as such, it pays for basic advice and sketches to maximise your chances of making a successful planning application.

&#8226 How much is on offer?

The £1.6bn given in ERDP grants over the programmes six-year duration looks big, says Mr Dunn. But by the time youve divided that figure up into each region, each year and each project type, the funds are limited.

For example, any one DEFRA regions annual funds for grants under the Rural Enterprise Scheme may allocate, say, £500,000 for marketing of quality agricultural products, £400,000 for tourist activities and less than £1m on diversification activities.

As more and more farmers diversify, the number of calls on that cash will obviously increase.

Projects that involve converting redundant buildings tend to receive 25% of "eligible" costs in grant aid. However, remember that those eligible costs do not cover fixtures and fittings and moveable items like computers and faxes.

Processing and marketing grants can amount to 30% of eligible costs, while the Rural Enterprise Scheme grants depend upon the level of economic return to the applicant.

&#8226 How long does it take?

For ERDP funding, from having the initial idea to being granted approval can take over six months, says Mr Dunn.

"You will need three months to gather the information needed for the application and then another three months for DEFRA to process it."

And you cant start work before the grant has been approved. "If you start spending before approval has been gained you risk the grant being refused altogether or all costs incurred before approval being disallowed," he adds.

&#8226 What sort of things are most of these grants for?

It obviously varies from adviser to adviser, but in Mr Dunns case they include building conversions, infrastructure – such as roads and bridges – associated with diversification activities and environmental schemes.

Other, more unusual, schemes he has advised on include a national marketing initiative for mohair, a pet food supply business and a scheme for the central storage and grading of root crops.

&#8226 What are the people who check grant

application forms

looking for?

Chiefly, that your proposal makes good economic sense and represents good value for public funds. You must demonstrate a need for your project and a benefit to the wider rural economy, environment – not just for you.

The grant body must have confidence in you as an individual being able to deliver what you promise, so it will examine whether you have the necessary personal and business skills to make a go of the proposed project. Also, that you are aware of the marketing, promotion and location aspects that will be necessary to make it work.

DEFRA is obliged to score your proposals on the potential benefits they will bring to the economy, environment and community. Economy means: will your proposals create local jobs? Environment is self-explanatory and community means: will it benefit the local community?

"Most farm-based schemes can meet the first two fairly easily, but the benefit to the community aspect is often harder to prove," says Mr Dunn. "Each region often has its own goals statement which will give you a clue as to its attitude towards development.

"Be sure your project fits as many of their goals as possible. This will help justify approving your scheme because it will be in line with local development/ regeneration policy"

DEFRA is obliged by the governments best-value principles to only give grant money to those who absolutely need it. While that makes sense in some ways, it can discriminate against well-planned projects that would have a high chance of success.

According to DEFRA, if you get no return from the project (ie its being done solely to benefit the environment or local community) you can get up to a 100% grant. If the plan is to get some economic return, youll get 30-50% of eligible costs and if you are likely to get a substantial economic return (eg a 25% return on capital or more) youll get 15-30%.

In practice, says Mr Dunn, if you indicate youll get a substantial return, then it must be questionable as to whether you need the grant at all.

Equally, some application forms ask whether the project would still go ahead, even if you didnt get the grant

If you answer yes to that, you may well not get the grant, says Mr Dunn.

"You must not lie, but the way you word things is important. If you want to get a grant, you need to demonstrate a gap in funding."

&#8226 How do I know whether my proposals are better than others put forward?

You dont, but you can be sure that funds are limited and that not every application will be accepted. "Bear in mind that you are in competition with other farmers and rural businesses," says Mr Dunn.

"The ERDP grant review panel sits every three months, so it could be that they have several very high quality schemes in the same batch as yours. Equally, yours may be the only decent one."

&#8226 Is there a good or bad time of the year to put in a grant application?

In most cases youll want to apply as quickly as possible so the project work isnt delayed, says Mr Dunn.

However, it may be worth applying at the start of the funding year when theres more money available.

And if you have a large project, you may want to spread the spending (and the grant funding) over several years.

It can also sometimes be a good idea to join forces with neighbouring farms to present a co-ordinated project, adds Mr Dunn.

&#8226 So, it is it worth going for a grant, then?

Yes, of course, provided you think you are eligible and are prepared to delay the start of your project until you get it, says Mr Dunn.

But he warns not to lose sight of your core business activities and objectives and to only proceed from a position of strength. "Remember, normally the majority of capital to be spent is yours and new activities generally increase exposure to risk, need new skills and plenty of management time.

"Bad ideas are still bad ideas, whether grant-funded or not."

Above and left: Conversion of redundant buildings into retail or offices is an increasingly likely reason for a grant. This is a Lincolnshire Organics farm shop at Holme, Scunthorpe.

Philip Dunn, agribusiness consultant at Brown & Cos Brigg office, says he is handling an increasing number of grants.

Left and below: More examples of farm building conversions. The one

on the left is a

former granary

being converted

into holiday lets.

Below is a redundant milking shed being converted into a

craft workshop.

GRANTAPPLICATION TIPS

&#8226 Try to get environmental organisations on your side. If you can show a project will increase birdlife, for instance, get the RSPB to write a letter recommending it.

&#8226 Get your MP on your side. If you are creating jobs he or she may well support you, which will strengthen your case. Likewise, involve the local parish and district councils.

&#8226 Dont be too optimistic with your claims. If you say youre going to create 10 jobs, youll be expected to do just that.

&#8226 Ring your local DEFRA office at the outset to see if your project fits their criteria. They will help to steer you in the right direction.

&#8226 When dealing with DEFRA staff, be positive, cheerful and polite.

USEFULPHONENUMBERS

Philip Dunn, Brown & Co 01652-654833

pdunn@brown-co.com

DEFRA Regional Service Centres

Cambs/Beds/Essex/Herts/Suffolk/Norfolk 01223-462727

Derbys/Leics/Lincs/Northants/Notts/Rutland 0115-929 1191

Cumbria/Lancs/Northumbria 01228-523400

Cleveland/Durham/Yorks 01609-773751

Berks/Bucks/Oxon/Surrey/E and W Sussex/Hants/Kent 0118-939 2256

Glos/Warks/West Midlands/Worcs/Herefordshire 01905-763355

Cornwall/Devon 01392-447400

Dorset/Somerset/Wilts 0117-959 1000

Regional Development Agencies

Eastern 01223-713900 South-west 01392-214747

South-east 01483-484211 West Midlands 0121-380 3500

East Midlands 0115-9888403 Yorkshire 0113-243 9222

North-west 01768-867294 North-east 0191-261 2000

Small Business Service 0845-604 5678