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

Section 7: New Entrants Scheme

Introduction

143. In order to provide support for new entrant young farmers it is envisaged that there will be various areas of support available. It is proposed there will be a start-up grant available for new entrant young farmers, as allowed through the European regulations, of €70,000 split into two payments over a maximum of five years. The grant support could be used for the purchase of equipment and machinery. It could also be used towards the construction or development of buildings and infrastructure.

144. Support will be aimed at young farmer new entrants. Despite SG arguing for greater flexibility the definition has now been set by the EC. It is a person who is 40 years of age or less at the moment of submitting the application; possesses adequate occupational skills and competence; is setting up for the first time in an agricultural holding as head of the holding, and has full control of the agricultural activity on the holding. These new entrant young farmers will be able to apply for the start-up grant.

145. In the stage 1 consultation 76% agreed with the proposed measures. Those who agreed thought that the measures would help to remove the substantial barriers to entry and incentivise new entrant/young farmers to the industry. There was concern over intergenerational renewal. It was suggested that public funds should not be used to support intergeneration exchange of a farm holding within families or the scheme should be tailored separately for intergenerational transfer versus new entrants. However regardless of whether it is intergenerational, or a young farmer starting up for the first time, we believe that providing assistance to ensure that young farmers can become head of a holding is a positive step for the future of agriculture.

146. New entrants and young farmers will also benefit from provisions in Pillar 1 which funds DP. We have successfully secured measures that mean existing new entrants will be able to access the new Basic Payment from day one. The National Reserve can be used to top up the value of payment entitlements for new entrants and young farmers to the regional average so that they are not disadvantaged during transition to area-based payments. We have the flexibility to apply further top-slices to top up the National Reserve to fund future new entrants. And there will also be a Pillar 1 Young Farmer payment available for those up to forty years of age who are setting up as head of the holding or who have done so in the 5 years preceding their first application for the new Basic Payment.

Legal basis

147. New entrant support comes under RDR article 20.

Rationale

148. At present the average age of farmers is increasing and insufficient opportunities exits to attract the numbers of new entrant farmers that the industry needs. This is a problem across Europe. It is a clear priority for SG to support generational renewal in agriculture in Scotland. Scottish farming needs to attract a steady flow of new entrant young farmers with drive, innovation and entrepreneurial skills.

149. In September 2012 the Scottish Government set up a New Entrants Advisory Panel. The Panel advises Government on the future role of support for new entrants. There has been active engagement with the Panel to explore what further or different articles could be introduced in the SRDP to remove barriers to entry and /or incentivise new entrant young farmers into the industry. A range of interventions were suggested by Panel which were broadly supported by stakeholders in the stage 1 consultation.

Financial allocation

150. The financial allocation for the new entrant's scheme is £20 million.

Options & purpose

151. The options consist of a range of support measures which should help new entrants to develop profitable, sustainable businesses. There is a dedicated measure for new entrants which is available to young farmers 40 years old or younger who have set up as head of the business for the first time and are in the first 18 months as head of the holding. The level of support available is up to €70,000 and is conditional of a business plan being agreed. The support would be in the form of two payments, the second payable on achieving the business plan.

152. The new Advisory Service will specifically support and mentor new entrants with one to one advice.

153. This package will encourage more new entrants and young farmers to set up and develop sustainable and profitable farming businesses. It will encourage them to develop new business opportunities and to make sure that their businesses are modern and make efficient use of the resources available to them.

Targeting

154. The scheme will be targeted at new entrants that fit the criteria as laid down in the EU regulation.

How it will work

155. The application process is being designed to be simple and quick with the date of initial application being the date used for the time barred/age related measure. Consistency of approach will be key as well as the need to approve quality applications.

156. Support is conditional of a business plan. Applicants would be strongly advised to have undertaken a whole farm review supported by the Government. If applicants did wish to supply their own business plan this would have to be reviewed by an accredited advisor.

157. Support will be in the form of two payments and it is proposed that the initial payment would be 75% of the total. The second payment would be payable on the business plan having been achieved and would be 25% of the total.

158. The acceptance of an application "in principle" - so that an applicant can have an application approved in principle prior to actually using it - useful for bidding for the tenancy of a farm should the opportunity occur - is being considered.

159. The new Advisory Service will specifically support new entrants. There is the view that the advice should not be free but new entrants should provide a lesser contribution. Advice could include mentoring and follow up.

Question 4

How would you rate your satisfaction with the proposals for the New Entrants Scheme? 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).