The Farming Forum recently held a Q&A session with Janet Hughes, Defra’s Future Farming and Countryside Programme Director.
Farmers were invited to submit their questions about the Sustainable Farming Incentive.
Clive Bailye, Director of the Farming Forum, put the most-asked questions to Janet.
This is part 1 of 2. Subscribe to the blog to watch part 2 when it's live.
No Likes
6 comments
Comment by David Rodda MBE posted on
Second Hand equipment - Under the Objective One EAGGF Programme (2000 to 2006) it was possible to support the purchase of second hand equipment. The buyer had to certify that the equipment had not previously had grant on it (usually a declaration from the seller) and had to state that the equipment would be in use for 5 years after the grant had been paid. They needed to get a quote for new and a quote for second hand which helped to prove the value for money (important for the Treasury as a lower grant for the same outcome will be of interest to them) of the second hand item. In my experience the majority of farmers usually went for the new item as the grant brought the cost closer to second hand values. But this assumes they can afford to purchase new in the first place which many cannot, otherwise they would have already made the purchase. Happy to share experiences of how this worked in practice. If either of the above was proven to be breached when audited the grant had to be repaid in full and that was made clear in the funding contract.
It is possible to be proportional on this especially if we look at compliance through a proportional risk lens. Under the small grant scheme the fixed grant is based on a certain specification set by DEFRA. Therefore it could be left up to the applicant about whether they wish to use that grant to buy a new or second hand item (noting the above caveats). If they choose to buy second hand then in effect they would get a higher grant rate which is likely to lead to accelerated uptake especially on smaller/less productive farms (who probably need it most).
For larger grants it could be possible to operate a similar approach but as the timescales involved are likely to be longer (EOI then full application) the chance of second hand equipment being available after the process has been completed and getting like for like quotes, even if it is, is problematic.
So I would allow the purchase of second hand under the small grant scheme and not second hand under the large grant scheme.
Comment by John hawkins posted on
A very sensible suggestion David as it might just encourage our industry to re invest at a time where there is so little certainty in land management that this is certain to stall the agri economy until 2022.
Comment by David Rodda MBE posted on
John, thank you. There is probably an embedded carbon argument here as well in terms of utilising something that has already been manufactured rather than something new which all helps the net zero objective as well. However, the contrary argument would be the economic gain delivered through new manufacturing and the fact that new equipment may be more efficient.
However, all grants assume that the applicant can afford to buy new equipment which excludes those who cannot. If needed DEFRA could pro rata the grant payed on the standard cost model (i.e. 40% grant on a new piece of equipment costing £10k would be £4k. If the applicant decided to buy second hand instead at a cost of £7k then the 40% grant would be £2,800. The Treasury will love that!
Comment by Ian Davis posted on
Sounds workable David. It was me who raised the original question and, being a small suckler operation, we cannot justify the cost of most of the options new.
There is no good reason why, for example, a used squeeze crush, direct drill or GPS guidance system should not deliver the outcomes perfectly adequately.
Comment by James Hedger posted on
Janet Hughes has said on the video above that it's too difficult to judge the quality of secondhand equipment. Why can't there be a system like AA approved second hand vehicles? Perhaps the AA or other organisations could provide an assesment service and certain 'grades' of SH equipment would be eligible for grant aid...............it certainly ticks some climate change boxes.
Comment by ron wis posted on
Totally AGREE with David Rodda.