New SFI Capital grants on used machinery etc

[Clive]

In the recent DEFRA q&a with Janet Hughes we discussed a members question that asked why capital grants were only available on new equipment when most farmer bought used

Reason given was it was very difficult to set a mechanism that wasn’t potential open to abuse from dealers etc (or how do you determine true value etc ).

TFF members were asked for suggestions for a mechanism that could potentially make capital grants for used equipment a reality

so …….. suggestions please ! ( they call this “co- design” apparently)

q&a video here, this question at 10.20 mins

 

[Pistonbroke]

The 28 page guidance booklet may say ?
Are you from Wales?

Yes. Had it first time. Phone won't download the guidance for some reason. Will look on the laptop

 

[Pistonbroke]

Dealer price has sod all to do with value-it's set according to what the customer will pay. Lots of new kit is cheaper on mainland Europe.

And has a dealer never invoiced full price for grant purposes then given the farmer a discount?

I had a machine from a dealer in England who hadn't heard about the Welsh grant,two neighbours had the same machine six months later and they were three grand more. Grant finished and they went back down

 

[Clive]

The grant in question for this thread are the capital grants planned under the new SFI scheme

currently they will only be for new machinery - in the video Janet says if we can come up with a robust mechanism to prevent fraud etc they could maybe be extended to used machinery

 

[Grass And Grain]

As @Clive said in the video, someone may have already purchased autosteer, direct drill etc. Neighbouring farmer might get grant for both.

Also, only a short list of eligible machinery. Veg grower might want a plough press, to make ploughing operation more efficient - not on the list of allowable items.

Better and fairer to have same capital expenditure grant available to each farm? E.g. we all get up to £4k each, only to be spent on capital items. Invoices to be provided, could be either new or second hand. Grant could still be set at 40%. Need to spend minimum £10k to get your £4k grant, keeping money and income tax flowing.

Not sure how you stop everyone using it to subsidise a new pickup!

I think DEFRA need to stop thinking they know what we want/need. Let the individual businesses decide themselves what they want, and make it fair by offering same amount to everyone.

Current system doesn't work for most, but works very generously for the few, whilst lining the pockets of machinery manufacturers and distorting second hand values. It's a lottery, and can be vastly improved. A large grant used by one farm can make him more efficient, and makes the neighbour who didn't receive any grant less competitive.

Needs to be fairer, accessible to everyone equally.

 

[Still Farming]

Smaller farmers often go for used or second hand as cheaper in the first place than bothering with the rigmeroll of place an expression of interest, paperwork, permissions if applicable ,buy ,claim and get paid back in stages over years performance?
Often the people who need these the most are the people that are put off ,don't bother or can't afford whatever.
Where there is a scheme there are schemers sadly?

 

[Goweresque]

The obvious solution to the grants for second hand items would be to to a) have a list of approved dealers (to which any machinery dealer could apply), b) to have rules for what second hand machinery would qualify, such as must be less than 5 years old, must be in good working order etc etc and c) pay a % of the cost.

I'm not sure why Janet Whatshername said there was an issue with pricing, because aren't capital grants paid on a % basis anyway? So it doesn't really matter what the price is, you always get the same % back?

The only real issues with grants for second hand kit are whether the item is up to the job and the State is getting value for money for what they are paying for. Given the farmer is going to have to pay the majority of the purchase price anyway, I really don't see what issues could arise - who is going to spend £10k of their own money on a clapped out machine worth scrap value thats been artificially priced at £10k just to get £4k back? Obviously there could be criminal fraud involving collusion between dealer and farmer, but that could happen with new stuff just as easily as second hand.

It could have a very good cascade effect down the industry - those at the top can get a grant on a new one and trade their old one in, which provides a supply of used equipment for those further down the food chain to buy and still get some grant money.

 

[steveR]

Obviously I snoozed

3 times??

 

[DRC]

The grant in question for this thread are the capital grants planned under the new SFI scheme

currently they will only be for new machinery - in the video Janet says if we can come up with a robust mechanism to prevent fraud etc they could maybe be extended to used machinery

The best thing would be do away with any grants for machinery . It’s like @Kevtherev said, proper contractors can’t get them, but then have to compete with a farmers son going round with his new direct drill or whatever .
That surely is distorting the market .

 

[glasshouse]

I had a machine from a dealer in England who hadn't heard about the Welsh grant,two neighbours had the same machine six months later and they were three grand more. Grant finished and they went back down

The obvious solution to the grants for second hand items would be to to a) have a list of approved dealers (to which any machinery dealer could apply), b) to have rules for what second hand machinery would qualify, such as must be less than 5 years old, must be in good working order etc etc and c) pay a % of the cost.

I'm not sure what Janet Whatshername said there was an issue with pricing, because aren't capital grants paid on a % basis anyway? So it doesn't really matter what the price is, you always get the same % back?

The only real issues with grants for second hand kit are whether the item is up to the job and the State is getting value for money for what they are paying for. Given the farmer is going to have to pay the majority of the purchase price anyway, I really don't see what issues could arise - who is going to spend £10k of their own money on a clapped out machine worth scrap value thats been artificially priced at £10k just to get £4k back? Obviously there could be criminal fraud involving collusion between dealer and farmer, but that could happen with new stuff just as easily as second hand.

It could have a very good cascade effect down the industry - those at the top can get a grant on a new one and trade their old one in, which provides a supply of used equipment for those further down the food chain to buy and still get some grant money.

Money goes to money

 

[Kevtherev]

Know of a lot of ‘grant’ aided machines sat under hedges going green with nettles growing round them surely that’s just a waste of resources isn’t it??

 

[Steevo]

Know of a lot of ‘grant’ aided machines sat under hedges going green with nettles growing round them surely that’s just a waste of resources isn’t it??

Perfect!!! That’s just what they want…taxpayer funds being used for re-wilding projects!!!

Far better than wasting the money on farming.

 

[Steevo]

Did you know…the nettles, brambles, elder bushes and eventually hedge that grows up through it will offset the carbon used to manufacture it at a rate of 10% per year?

Once the ecosystem is fully established it will then offset enough carbon for a distance of 3 metres of flight for a Boeing 747 travelling to New York…..EVERY YEAR!

 

[Wombat]

As @Clive said in the video, someone may have already purchased autosteer, direct drill etc. Neighbouring farmer might get grant for both.

Also, only a short list of eligible machinery. Veg grower might want a plough press, to make ploughing operation more efficient - not on the list of allowable items.

Better and fairer to have same capital expenditure grant available to each farm? E.g. we all get up to £4k each, only to be spent on capital items. Invoices to be provided, could be either new or second hand. Grant could still be set at 40%. Need to spend minimum £10k to get your £4k grant, keeping money and income tax flowing.

Not sure how you stop everyone using it to subsidise a new pickup!

I think DEFRA need to stop thinking they know what we want/need. Let the individual businesses decide themselves what they want, and make it fair by offering same amount to everyone.

Current system doesn't work for most, but works very generously for the few, whilst lining the pockets of machinery manufacturers and distorting second hand values. It's a lottery, and can be vastly improved. A large grant used by one farm can make him more efficient, and makes the neighbour who didn't receive any grant less competitive.

Needs to be fairer, accessible to everyone equally.

It’s like cattle crushes you cannot get a basic one on grant you need an all singing all dancing one that cost 5k or so and when you ask if you can get a basic one it’s like no sorry we are full up building grant ones ffs

 

[Steevo]

It’s like cattle crushes you cannot get a basic one on grant you need an all singing all dancing one that cost 5k or so and when you ask if you can get a basic one it’s like no sorry we are full up building grant ones ffs

How have we managed to adopt the European way of doing business…?!

 

[Jackov Altraids]

Surely the capital grant is meant to encourage a particular practice. Why not simply pay a premium per unit of that practice [upto a maximum of half the value of a new machine over 5 years] and then you are free to buy old / new or pay a contractor.
The money will be spread around more so less distortion and the desired outcome is achieved rather than having new machines parked up and under / un used.

 

[renewablejohn]

Well 2 pages in and no suggestions its not looking good. Its a very simple problem with an easy solution. Just give every farmer a fair basic fixed sum say 20k for looking after the environment no strings attached just common sense rules on the does and dont's to improve the environment. Then allow for capital grant to be claimed on any machinery upto the value of 20k on the production of a valid invoice. Just scrap all the nonsense and paperwork of the proposed SFI system and put in a sliding scale per acre for environment management payment to show how much the government supports farmers in making the countryside a sustainable green and environmentally friendly pleasant land. Then all you need do is to revamp the Environment Agency into the supportive role of working with farmers to gain the best possible environmental outcomes. Without this climate change is going to bite hard due to the existing Environment agency non existant policies or worse the hinderance of farmers carrying out work which the Environment Agency should actually have done themselves.

 

[Suffolksucklers]

On the latest round of countryside productivity they had a figure which they had assessed you could buy it for and then paid a percentage based on this. If you got it cheaper or had to pay more you still only got this assessed figure. Cant see why this approach wouldn't work for second hand items aswell, seems a fairly simple approach to me

 

[hendrebc]

The only way I can think is an interview or something, maybe on farm, with someone with a clipboard, that you can show them why you need something and ask for an amount towards it. You'd need to make some sort of written application as well showing second hand or new prices for what you want and show how it would help you and how a certain amount towards it would help. It could be for literally anything new or old. Then a visit later on to see how the money you've been given has been spent band if it has been worthwhile. Might not need the interview bit?
It's far from perfect but I don't see anyone else with any suggestions how to do it with second hand stuff. Just moaning about how it distorts prices. Which it does.

 

[Highland Mule]

10:18 into the video “it devalues all of our second hand machinery”.

Doesn’t this prove that the scheme already benefits those who don’t buy new, if the “devalued” second hand stuff filters through the market ?

 

[Tubbylew]

I'm not sure that you can tbh, how do you know the equipment isn't pinched, HMG wouldn't want to be seen to fund crime, also how would part exchanges work, i.e would you claim the grant on used kit then claim it on new kit, where there's a scheme there's a schemer and all that.

Maybe they could give out vouchers, that we could spend as we see fit, they could even use a voucher thats widely accepted by a range of suppliers and contractors, hang on....