Scotland Rural Development Programme (SRDP) 2014-2020 Stage 2: Final Proposals

Section 13: Non-Agricultural Business Support: Food and Drink

Introduction

273. It was clear from responses to the stage 1 consultation that there is strong support for continuing investment in the food and drink sector. The consultation invited respondees to consider whether, in future, this support should be delivered via wider business development support mechanisms or remain managed within the Scottish Government. The balance of opinion favoured integration with business development systems primarily because of the potential to streamline the processes which companies have to negotiate to secure assistance. However a significant minority favoured the current arrangements, expressing concern that rural food producers could be disadvantaged should the food grants scheme be amalgamated into the wider business development landscape.

274. Amongst other comments support was shown for food and drink support measures to retain its own ring-fenced budget and for the decision-making process to be made by competent individuals, irrespective of where final delivery rested. A need to recognise environmental and sustainable factors was seen as necessary by some respondents as well as a need to address public health issues.

Food Processing, Marketing and Co-operation (FPMC) grants scheme 2007-2013

275. The existing FPMC scheme has delivered support to 175 projects. Grant awards totalling over £47 million were committed, leveraging around £160 million in private-sector investment and creating/safeguarding about 8,500 jobs. The bulk of projects assisted involved providing support for capital investment in new or upgraded processing facilities, with buildings, plant and equipment eligible for assistance. A large number of food producers have been assisted - providing valuable markets for Scotland's primary producers (including meat and dairy producers, fruit, vegetable and cereal growers.) Many of the businesses assisted had a strong export focus and consequently contributed to the Scottish Government's export-growth targets and objectives.

276. More limited support was provided to businesses delivering co-operative/supply-chain benefits although several, substantial, projects were assisted. The relatively low-level of uptake is something that should be considered and addressed in the 2014 - 2020 scheme.

277. Latterly, the FPMC scheme opened to applications from the brewing and distilling sectors, with several new breweries and distilleries gaining support. These sectors had, hitherto, been indirectly assisted through FPMC support to a number of large-scale cereal co-operatives - providing malted-barley.

Food and Drink Support 2014-2020

278. The food and drink sectors have delivered strong growth over the past seven years exceeding their own targets for turnover and exports. However significant issues remain to be overcome and there are many new opportunities to grasp. The support provided under the current FPMC has been a vital component of past success and will contribute the same to future growth. We therefore intend, under the refreshed scheme, to continue with significant levels of support.

279. We acknowledge how important it is that food and drink companies when they are seeking support for their future plans are able to access joined up public assistance and advice. We therefore intend to explore with Scottish Enterprise (SE), Highlands and Islands Enterprise (HIE) and Scotland Food and Drink how to integrate the support we provide into a one stop shop of public support for food companies. Whilst we have yet to decide whether to transfer FPMC grants formally from SG to the enterprise bodies (and consultees' comments on this are welcome) these discussions will certainly lead to arrangements that streamline processes for applicants, better aligning with food and drink priorities and sharing best practice and knowledge between support schemes.

Legal basis

280. RDR Articles 18 (investments in physical assets) and 36 (co-operation)

Scope

281. As now, support will be available to and targeted at businesses falling within the EU SME definitions. Assistance will therefore be available to micro, small, medium-sized and Intermediate-sized businesses. In the EU regulations small businesses are those who have fewer than 50 employees whilst intermediate businesses must have 750 or fewer employees. Turnover / balance sheet thresholds also apply.

282. State Aid rules will determine the maximum level of support that can be provided.

283. The funding will be open to businesses in Scotland who are engaged in an economic activity, irrespective of its legal form. This will include self-employed persons and family businesses and social enterprises.

284. Support could be provided to existing businesses or to new start-ups.

285. The funding available will be in the form of start-up grants for new enterprises, and business development grants for tangible and non-tangible investments (capital and non-capital).

Budget allocation

286. We have allocated £70 million for this support, which is broadly similar to current spending on FPMC-assisted projects.

Selection Criteria

287. Detailed selection criteria will be developed before the scheme opens to new applications. Key considerations could include:

• Contribution to the Scottish Government's overall strategies for economic development and the rural economy.
• Making a contribution to national policies for food and drink.
• Assisting the Scottish Government with its wider social policies - such as supporting or encouraging healthier eating through the provision of greater and healthier food-choices for consumers.
• Supporting export targets for food and drink sectors. This could include providing increased funding to projects with a strong export focus/developing new markets.

Question 24

Do you agree with the proposal that we should continue to give significant support to the food and drink sector? Yes/No/No opinion

Please tick the appropriate box in the online questionnaire.

Question 25

Selection criteria such as those listed above should apply to that support? Yes/No/No opinion. Please tick the appropriate box in the online questionnaire.

Question 26

Steps should be taken to streamline processes for food companies including a one stop shop for public support? Yes/No/No opinion

Please tick the appropriate box in the online questionnaire.

Question 27

How would you rate your broad satisfaction with the proposals for Food and Drink support?

Please tick the appropriate box in the online questionnaire.

Very satisfied
Quite satisfied
Neither satisfied nor dissatisfied
Quite dissatisfied
Very dissatisfied

If you are dissatisfied please briefly outline your reasons (in the space given in the online questionnaire).