Scottish Rural Development Programme 2014-2020: ex-post evaluation - annex A scheme summary report

13. New Entrants Start-Up Grant Scheme

Scheme description

The New Entrants Start Up Grant Scheme (NESUGS), which started in 2015, provided capital grants to those who started their agricultural business in the last 12 months. To be eligible for this grant support, applicants also had to: be over 16 years of age (there was no upper age limit); have access to a minimum of three hectares of land; and have a registered business with the SG.

The scheme was designed to help overcome barriers to entry and attract talented people into the agriculture sector. Capital grant funding could be used towards the costs associated with starting up an agricultural business. For example, for purchasing land, equipment, machinery or livestock, or constructing buildings or infrastructure.

Public expenditure

The NESUGS was programmed to contribute to Priority 2 (Enhancing farm viability and competitiveness of all types of agriculture in all regions and promoting innovative farm technologies and the sustainable management of forests), and to FA 2A.

A summary of the public expenditure achieved by the NESUGS under the SRDP 2014-2020 is provided in Table 13.1. The NESUGS made final co-financed payments to beneficiaries in 2020.

Source: Scottish Government, Annual Implementation Report 2023.

Performance indicators

A summary of the outcomes achieved by the NESUGS is provided in Table 13.2.

Source: Scottish Government, Annual Implementation Report 2023.

Scheme evaluation

A joint evaluation of the NESUGS and YFSUGS was undertaken (2022) given the similarities of both schemes. The internal evaluation was undertaken by the SG RESAS. The aim of the evaluation was to examine the extent to which the schemes contributed to achieving their intended aim to attract a new generation of farmers in agriculture. The evaluation methodology comprised a data review, literature and policy review, and an online beneficiary survey. The evaluation report largely outlines findings of relevance to both schemes although some findings are unique to each individual scheme.

What worked well and less well

The evaluation identified the following aspects of the NESUGS and YFSUGS which worked well, including that:

• the two grant schemes were very popular and over-subscribed, resulting in their premature closure.
• demand for support from the NESUGS and YFSUGS was strong - there was a much higher uptake than originally anticipated, in particular during the first few years of the schemes.
• both grant schemes could have supported more young farmers had additional financial resources been available – albeit the evaluation noted that an increased budget on its own could not be expected to fully address the wider structural issues that prevent generational renewal in the farming sector.
• grant payments were made in two instalments, with the first instalment made via a claim once arrangements were made to purchase the necessary start-up materials. The second payment was provided on achievement of the milestones set out in the business plan. The payment structure made these schemes different to other SRDP capital grant schemes, and eased cash-flow issues for supported beneficiaries.
• it was possible for beneficiaries of the new entrant schemes to apply for capital grants (for different projects) through the SRDP – this provided potential synergies.

For the NESUGS specifically, the evaluation noted that this scheme had a low approval rate (based on the percentage of applications submitted that were approved). In part, the evaluation suggests that the low approval rate may have been due the scheme eligibility criteria (and in particular that awards were dependent on applicants already having access to land for farming).

The schemes’ evaluation report notes that the following aspects worked less well, including:

• many of the supported farms struggled to be profitable at the time of evaluation.
• the aims of the two grant schemes were only partially achieved - less than 1% of the total number of Scottish agricultural holdings and approximately 1% of the total number of farm businesses were supported. The schemes have not led to a change in the overall composition of the farming sector.
• no evidence was found to support the continuation of the start-up grants (in their current form), as a method of encouraging generational renewal in the farming sector.
• the NESUGS and YFSUGS had limited scope to encourage meaningful change in the age composition of the farming sector within the timeframe of the evaluation – not least given the considerable constraints of land availability and profitability.

Lessons learned

The schemes’ evaluation notes the following points regarding lessons learned:

• setting a target for a total proportion of farmland to be managed by new entrants going forward could result in a budget more adequate to this extensive task.
• future efforts to support new entrants into the farming sector should explore methods to increase the circulation of farmland, facilitating more farmland going onto the market could, in turn, attract new farmers and businesses.

Current status of the scheme

The SRDP supported NESUGS closed to new applications in 2018.

The NESUGS was not part of the transition programme as the budget was exhausted. A range of support for new entrants continues to be funded by SG. These largely focus on training, advice, knowledge transfer, freeing up public land, and a policy group governing these outputs and thinking creatively about existing and future new entrant support.