New Entrants and Young Farmers Start-Up Grant Schemes: evaluation

1 Policy Context

1.1 Background and Context

The Young Farmers Start-Up Grant (YFSUG) and New Entrants Start-Up Grant (NESUG) provide funding to farmers who were either under 41 or early in their agricultural business development, respectively. The over-arching goal of encouraging new and young people into the farming sector was to sustain the economic basis of farming and help to retain people in rural communities, via the development of agricultural production on small or recently established agricultural businesses.

There were two schemes.

• The YFSUG is aimed at those who are starting an agricultural business for the first time or who are taking over an existing agricultural business. This grant is worth €70,000.
• The NESUG is aimed at those who started their agricultural business in the last 12 months. This grant is worth €15,000.

For YFSUG, at the time of submitting their application:

• Must be between the age of 16 years and under 41 years of age at the point of application
• Must be setting up as head of the holding of a new or existing farming business for the first time
• Must have a suitable formal agricultural qualification (at least to national vocational qualification level 2 or equivalent) or be able to demonstrate at least five years' agricultural experience
• Must have registered your business with Scottish Government

For NESUG, at the time of applying, they must be:

• Must be over 16 years of age; there is no upper age limit
• Must be within a year of starting your agricultural business
• Must have a minimum of three hectares of land
• Must have registered the business with Scottish Government

Applications to the NESUG are dependent on applicants already having access to land.

The application process states that for both schemes:

"Funding can be used to help with many of the costs associated with starting up an agricultural business. This could include purchasing land, equipment, machinery or livestock, or constructing buildings or infrastructure."

Grants are twofold – with the first instalment being made via a claim once arrangements have been made to purchase start-up materials and the second being provided once the 'milestones' from the business plan have been achieved.

In terms of how land is accessed, it is emphasised that preference was given in to non-succession cases, in the event of demand exceeding available grants.

These eligibility criteria will have, by definition, prevented some people from applying for the grants, and so some potential applicants will have been excluded as a result.

1.2 How many Applicants Have Been Supported?

A total of 626 applications were made to the Young Farmers Start-Up Grant scheme. Of these, 205 were accepted (acceptance rate = 33%). A total of 128 applications were made to the New Entrants Start Up Grant scheme. Of these, 49 were accepted (acceptance rate = 38%). Funding closed to new applicants during 2017 owing to the exhaustion of available funds. The total budget allocated to the schemes during this time was £10.8 million (€13.0 million) for YFSUG, and £0.8 million (€0.9 million) for NESUG.

1.3 Current Policy Context

At present, there are no plans to reintroduce farming start-up grants. However, the Scottish National Party's 2021 Election Manifesto committed to "provide more support for new and young entrants into farming, including a specific new entrants fund". Further information is likely to be announced during this Parliamentary term. As already noted, the following direct financial support remains available:

• The National Reserve Young Farmer category, which is expected to continue through to 2024 providing young farmers the opportunity to receive an allocation of payment entitlements under the Basic Payment Scheme;
• The Young Farmer Payment is also expected to continue through to 2024 providing young farmers a top-up to their Basic Payment Scheme;

The Scottish Government continues to implement a programme of measures to help generational renewal in the agricultural sector. At the forefront, and following the success of the Forestry and Land Scotland starter farm programme between 2012 and 2015, an independent group was established by the Scottish Government to maximise starter opportunities on all publicly owned land. The 2016 report showed the steps all public bodies who possess land can take to open up farming to a new generation. Importantly, it also highlighted the value of a co-ordinated approach and as a result the Scottish Government put in place the Farming Opportunities for New Entrants group. So far, FONE has helped 70 new entrants into the agricultural sector by providing 107 opportunities over mainly 7,000 hectares of publicly owned land. Under FONE, the basic remit is to provide a business opportunity to a new entrant that will, typically, generate a part-time income and allow for second incomes needed.

The Scottish Government also funds the Scottish Land Matching Service. The SLMS acts as a free service connecting those in the agricultural sector throughout Scotland. It engages with those seeking or offering joint venture arrangements in relation to land and facilitates discussions with a view to parties progressing to successful arrangements. By doing so, it provides a platform for opportunities for the next generation of farmers and forms part of an exit strategy for farmers wishing to take a gradual or complete step back from farming.

The Scottish Government's National Reserve (Young Farmers and New Entrant) provision can also provide farmers and crofters with the opportunity to receive an allocation of payment entitlements under the Basic Payment Scheme as well as the young farmer Basic Payment top-up.

Finally, practical support is available through the Scottish government's Farm Advisory Service, which includes (i) a programme providing numerous activities to aid potential and aspiring new entrants at various stages in developing their business, and (ii) it also offers new entrants free support through its mentoring programme.