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

 

[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!

 

[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.

 

[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....

 

[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

 

[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.