Future of the Farm Business Improvement Scheme a concern

It has been revealed that there were 3,550 applications to Tier 1, with less than half being issued Letters of Offer, and a further 156 eligible applications for Tier 2 which has a maximum capital grant of £250,000.

It was over four years ago when, in May 2013, the Agri-food Strategy Board announced plans for an ambitious £250m Farm Business Improvement Scheme. The proposal was then formally approved by the Northern Ireland Executive and as a result many local farmers began to plan for investing in their buildings and equipment to improve productivity and efficiency across their farms.

It took two years to develop the scheme so when applications for the two Tiers of the first tranche opened it was no surprise that interest was high. Ulster Unionist colleagues of mine revealed last year that a massive 3,600 farmers had attended the purely advisory six information roadshows.

The scheme has not been without its problems however and a number of UUP representatives are working with constituents to help them resolve a number of issues, including barriers being presented by the NIEA in relation to ammonia emissions.

We recently wrote to the Permanent Secretary Noel Lavery asking for an update on the overall roll-out of the scheme and this week we received a detailed response.

In it he told us that by the deadline of October 31, 2016 there had been 3,550 applications received for Tier 1. This Tier was for projects costing between £5,000 to £30,000 and was primarily designed to assist with the purchase of equipment and machinery. The 1,580 applicants with a score of 74 points or above were issued Letters of Offer and 1,520 of these were later accepted. A total £7.6m has been committed in the first tranche of Tier 1.

As of the end of last month 923 claims for payment by farms had been received by the Department, with a combined worth of over £4.5m, with £1m being issued so far as farm visits to verify purchases continue.

Applications to the larger Tier 2 closed on 10 March 2017 with 189 applications received. Initial criteria checks found that 33 of these were ineligible with a number of reviews still ongoing. A number of explanations for these ineligible applications have been identified and these include applicants not submitting a Letter of Support from their lending institution, applicants not submitting a required businesses plan, and applicants not being in possession of a Farm Business Identification Number.

The Department has assured us that it expects to start issuing Letters of Offer to successful applicants by the end of the summer. A budget of £10m has been set aside for the first tranche of this higher Tier 2.

Whilst it does appear that the Department is now swiftly making its way through most of the applications for this first tranche of the FBIS, I remain deeply concerned about the longer-term commitment to this scheme.

When my Party last year asked both the Finance and Agriculture Ministers why they had only provided £40m to cover the first two tranches of the FBIS, neither of them were prepared to give a direct answer as to whether they are still committed to providing the full £250m.

Even now when we asked about an update on the second tranche of the scheme, which was initially planned to open in the autumn of this year, the Department was only able to tell us it would be informed by the roll-out of the first tranche and that decisions of the roll-out of the next would simply be ‘taken closer to the time’.

I have a real fear that in the ongoing absence of an Executive, and with budgets tight across nearly every Government Department, timescales may slip and that the final FBIS may in fact be significantly smaller than the £250m scheme that was initially promised. That simply cannot be allowed to happen.