5 April 2002

Pitfalls to beware of when applying for an RES grant

Applying for a grant

under the Rural Enterprise

Scheme is not always

straightforward, but the

results can be well worth

the effort. Andrew Shirley

reports on a Lincs couples

diversification dream

ENTHUSIASM is one of the most vital components of any successful project, reckons ADAS business consultant Andrew Fraser. And enthusiasm is something his clients Nick and Ros Loweth have by the bucketload.

Helped by Mr Fraser, the farmers from East Heckington, near Sleaford, have just started on a £300,000 farm shop project, partially funded by a grant of over £100,000 from the Rural Enterprise Scheme.

"Trying to diversify as a last resort is the worst thing that can happen," says Mr Fraser. "Enthusiasm drives diversification, not just a desire to rescue a business. Any potential scheme must be something the farmer is really interested in otherwise it probably wont work."

In the case of Mr and Mrs Loweth, food has always been high on their list of priorities. Five years ago they began to sell home-grown asparagus to local supermarkets. But, fed up of dealing with the fickle retailers, Mr Loweth decided to supply restaurants, under the Abbey Parks brand, in London instead.

"The farm shop seemed the natural progression. We had the over-riding feeling that people wanted speciality food and vegetables." However, the process of applying for the grant and getting approval was more difficult and time-consuming than expected.

"We dont have any criticism of DEFRA but we had hoped to start building last autumn," says Mr Loweth. "If you have a well-developed idea, allow a year before the funding comes through and things get started," he advises.

Timing is very important when applying for cash under the scheme, adds Mr Fraser. "Because DEFRAs deadlines are on a rolling quarterly basis, you risk delaying the project if you miss one."

Budgets are also limited. "The amount of funding is finite and the whole process is very competitive – the pool of cash available can run out quite quickly. My only point of issue with DEFRA is that there is a lot of pent-up demand and farmers could end up disappointed."

One aspect of the RES that has deterred more producers from applying is the amount of effort required to put together a successful application. The actual form is not that complicated, says Mr Fraser, but he points out that a lot more extra information is required besides.

"I have heard of some cases where farmers have just filled out the boxes on the form without any extra information to back up the application. These are unlikely to get very far."

Because DEFRA will only bankroll up to 50% of a project, extra funding will usually be required from other sources. "A good business plan will also go down well when approaching a bank or other lending organisation, so it is worth making the effort," says Mr Fraser.

"Initially we thought we could do everything ourselves," says Mrs Loweth. "But when we realised the level of detail DEFRA wanted we decided to get help from a consultant."

Mr Fraser admits some aspects can seem complex, but points out a lot of money is at stake. "DEFRA has to be seen to be spending public money wisely and at the end of the day the scheme is incredibly flexible."

Even so, producers have complained that the need to employ an expert means preparing the application can be too costly in the first place – often running into thousands of £s.

But other sources are available to help finance these costs. The Loweths got a grant from their local Business Link branch, which partially covered Mr Frasers professional fees.

Spending time on the application is vital. "During the process DEFRA wont visit the proposed site. Its decision will be purely based on what you submit."

Before even putting pen to paper the Loweths travelled the country visiting other farm shops looking for ideas. "We did a lot of groundwork," says Mrs Loweth.

Planning is another vital aspect of any proposal, and one Mr Fraser feels is sometimes overlooked. "DEFRA is unlikely to look at projects where permission hasnt yet been granted. Start the process early and talk to the planners first. Find out what they are looking for and look at the local plan. Any scheme must be realistic."

After much hard work, the Loweths farm shop and coffee shop is now under construction and should be open for business in the summer, selling home-grown asparagus and a wide range of other brought-in produce. "We are looking forward to offering a one-stop shop that will compete on price with the supermarkets," says Mrs Loweth. &#42

APPLICATIONADVICE

&#8226 Choose a scheme that interests you.

&#8226 Check if other funding is available.

&#8226 Do plenty of background research.

&#8226 Allow plenty of time, ideally a year.

&#8226 Get planning permission first.

&#8226 Ensure supporting documents are sufficiently detailed.