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

 

[Kevtherev]

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.

I always find the clipboard essential for whacking @Cab-over Pete

 

[mo!]

The whole point of the grant is to distort the market. Its government's way of nudging you into doing what they want, so the current fashion of DD or crushes for improved safety and animal welfare. Contractors don't get grant money stolen from BPS because they don't get BPS directly. The failings of the English productivity grant were that the period was too short, the figures were too low (the mythical 40% was more like 30%), the specifications too tight and the arbitrary limits too high and too low. Small farms struggled to make up the 7K and large farms could only get the top figure (I can't remember as it wasn't relevant to us).

 

[Jackov Altraids]

Ok, here's my answer;

Defra have a choice. They have a simple scheme that doesn't try to be perfect but any money 'wasted' is much less than the cost of running a more complicated scheme and you have a much higher proportion of uptake.

or;

You have a very complicated scheme with precise aims and achievements.

The current proposals fall squarely between the 2. A complicated scheme that doesn't even know what it is trying to achieve therefore has confused aims.

If the scheme had precise aims, all the money being thrown at 'advice' should actually be for any land owner/manager to make a proposal of how they will meet those aims and how/ what funding that it requires. Those millions being spent on advisors is a complete waste of time unless you can formulate a plan together. If you are going to take the time and expense of formulating a plan, why the hell shouldn't it be bespoke?

Edited to add;

Your bespoke plan could include buying a second hand plough, cutting your own fencing stakes or anything that led to the desired outcome of reducing carbon footprint, increasing sustainability or improving the environment.
Bespoke plans should be able to combine all 3.

 

[holwellcourtfarm]

The whole point of the grant is to distort the market. Its government's way of nudging you into doing what they want, so the current fashion of DD or crushes for improved safety and animal welfare. Contractors don't get grant money stolen from BPS because they don't get BPS directly. The failings of the English productivity grant were that the period was too short, the figures were too low (the mythical 40% was more like 30%), the specifications too tight and the arbitrary limits too high and too low. Small farms struggled to make up the 7K and large farms could only get the top figure (I can't remember as it wasn't relevant to us).

The scheme(s) were clearly unfairly targeted at larger farms. For a small farm with an annual turnover under £100k funding the 60% share to buy new kit makes it unrealistic.

As an example: the SFI soils standards (arable and grassland) all base their advanced level on using rtk steering kit to achieve the "restricted traffic". Adding that to a 20 year old tractor costs as much as the tractor itself if you have to buy new. What's wrong with buying used, for half the price, to achieve the same result? In fact, what's wrong with going down the AgOpenGPS route and doing it DIY for under £2k? Why shouldn't that still get 40% grant if it does the job? In fact even that option wasn't available under the CSPGS as the guidance systems funded under that had to deliver variable rate or section control as well which then means changing your 15 year old spreader and sprayer at unaffordable cost.

 

[holwellcourtfarm]

Schemers will always be a problem with any of these schemes. I'm gong to be unpopular here (tin hat firmly on) but where that is found out that business should be banned from all future subsidy and any current schemes cancelled.

Zero tollerance. Its actually other farmers they are stealing from......

 

[farmerm]

Capital grants are open to abuse however you jig them. In many cases those who gain the most from grants are usually those who need the money the least! Perversely grants can artificially inflate market prices and actually make such purchases even less unaffordable for those who are unable or unwilling to access the schemes.

Why are grants needed to fund equipment purchases? Either items can return a worthwhile return on the investment or they can not. How about simply having a food production system in which producers are rewards sufficiently for their outputs that they can afford to invest with a degree of confidence.... If the problem they are trying to solve is simple about helping with financing of such purchases then Government backed interest free loans offer far better value for money to the taxpayer and much greater flexibility than grants and would create far less market distortion.

 

[Jackov Altraids]

Capital grants are open to abuse however you jig them. In many cases those who gain the most from grants are usually those who need the money the least! Perversely grants can artificially inflate market prices and actually make such purchases even less unaffordable for those who are unable or unwilling to access the schemes.

Why are grants needed to fund equipment purchases? Either items can return a worthwhile return on the investment or they can not. How about simply having a food production system in which producers are rewards sufficiently for their outputs that they can afford to invest with a degree of confidence.... If the problem they are trying to solve is simple about helping with financing of such purchases then Government backed interest free loans offer far better value for money to the taxpayer and much greater flexibility than grants and would create far less market distortion.

It also distorts rules, regulations and ultimately legislation.

I'm not sure trailing shoes will be found to be such a good thing in the fullness of time but there is a lot of money to be made if everybody has to buy one.
I think 'numnuts' is a good idea but in practice it's dumb. Those with a vested interest are trying to make it a legal requirement which makes production less sustainable.

 

[Still Farming]

Some just buy for the sake of it too???

 

[Yale]

It’s not all bad. The grants allowed us to buy this drill which I could not justify full price and it’s been used quite a bit this year.

It was our money anyway.

 

[Sid]

I'm not sure trailing shoes will be found to be such a good thing in the fullness of time

Why is that?

 

[Cab-over Pete]

I always find the clipboard essential for whacking @Cab-over Pete

Thats workplace bullying that is.

 

[Sid]

Thats workplace bullying that is.

Does he work?

 

[Steevo]

Capital grants are open to abuse however you jig them. In many cases those who gain the most from grants are usually those who need the money the least! Perversely grants can artificially inflate market prices and actually make such purchases even less unaffordable for those who are unable or unwilling to access the schemes.

Why are grants needed to fund equipment purchases? Either items can return a worthwhile return on the investment or they can not. How about simply having a food production system in which producers are rewards sufficiently for their outputs that they can afford to invest with a degree of confidence.... If the problem they are trying to solve is simple about helping with financing of such purchases then Government backed interest free loans offer far better value for money to the taxpayer and much greater flexibility than grants and would create far less market distortion.

Grants are "needed" because as you touch on, the output of the farm is not sufficient to be able to justify farming in the way the rules/regs/government preferences are heading.

I was thinking today I could be a much more efficient arable farmer if I had a proper "grain analyzer" machine rather than relying on my merchant to test the samples for me. I could segregate grain as efficiently as possible at harvest, carry out experiments on different fields with more/ness nitrogen etc. I cannot think of many other industries that don't have testing equipment to ensure the quality of their output product. I could say the same about a weighbridge also.

I could not justify either of the above based on its ability to pay back.....because the cost of all this kit has gone up and up and up over the decades, whereas agricultural produce has not.

 

[farmerm]

Grants are "needed" because as you touch on, the output of the farm is not sufficient to be able to justify farming in the way the rules/regs/government preferences are heading.

I was thinking today I could be a much more efficient arable farmer if I had a proper "grain analyzer" machine rather than relying on my merchant to test the samples for me. I could segregate grain as efficiently as possible at harvest, carry out experiments on different fields with more/ness nitrogen etc. I cannot think of many other industries that don't have testing equipment to ensure the quality of their output product. I could say the same about a weighbridge also.

I could not justify either of the above based on its ability to pay back.....because the cost of all this kit has gone up and up and up over the decades, whereas agricultural produce has not.

If the gains to be made from having such equipment are not be sufficient to pay you back how does using tax payers money to buy it stand to give something meaningful back to taxpayers? Grants would only push up the cost of such items further... the more specialist the product the fewer suppliers competing and the greater extent to which grants distort the market.

 

[Steevo]

If the gains to be made from having such equipment are not be sufficient to pay you back how does using tax payers money to buy it stand to give something meaningful back to taxpayers? Grants would only push up the cost of such items further... the more specialist the product the fewer suppliers competing and the greater extent to which grants distort the market.

I do agree.

One important factor however is that the gains from having such equipment are not sufficient to pay back.......because government policy has created a situation where farmgate prices have not kept up with the wider world. Say what you want about "global markets" and competing internationally with those that can do it cheaper - it's not so much they can do it cheaper, but that our costs have been significantly increased domestically, whilst maintaining a "cheap food", "low inflation" policy. It has created significant disparity.

As posted in another thread.....

If you asked the average person on the street how much it would cost to harvest an acre of crop, cut it, thresh out the grain part you want, place the straw in a neat straight row and evenly spread the chaff across the full area…..I doubt many people would think it could be done for £40!

And then once they know that….I think they would be surprised that the machine doing it would cost a quarter of a million pounds to buy.

 

[Jackov Altraids]

Why is that?

It's just a guess but I feel that continual use of trailing shoes could well have a considerable impact on soils. It isn't a natural thing to happen and it could affect soil structure and its biology, its water retentive properties, worms/larvae/invertebrates and roots.

By far and away the greatest benefit of letting every farmer having his own plan for achieving Defra's aims would be the enormous amount of data that would be collected on the effectiveness of different methods in different conditions. There would be real evidence as to the impacts and benefits of farming in every way.

 

[jack6480]

Will there be funding again to enter this year??

 

[Hampton]

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

And for some bizarre reason, the width of the crush has to be the exact width of a standard IAE crush?!