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AGRICULTURAL BUSINESS DEVELOPMENT SCHEME (ABDS) EXPLANATORY BOOKLET - Form ABDS1
Section 1: ABOUT THE AGRICULTURAL BUSINESS DEVELOPMENT SCHEME (ABDS)
1.1 ABDS AND ITS OBJECTIVES AND AIMS
1.1.1 What is the ABDS?
The ABDS is an innovative business development scheme for farmers/crofters and immediate family members introduced under the Rural Development Regulation (EC) No 1257/1999. The Scheme is jointly funded by SEERAD and the EU.
The ABDS can provide assistance towards investments in agricultural holdings, the development of new, or expansion of existing agricultural diversification projects or non-agricultural diversification enterprises, based either on or off-farm/croft to increase the income generating capacity of the farming family.
1.1.2 What are the Objectives and Aims of ABDS?
The ABDS is designed to assist with:-
The restructuring or re-orientation of agricultural production by exploitation of new business opportunities, expansion of holdings, improvement of product quality.
Improvement of co-operation and collaboration among producers by encouraging collaborative ventures involving three or more eligible persons each linked to a separate agricultural business.
Creating new, or extending existing, alternative agricultural diversification on the farm/croft by the agricultural business.
Creating new, or extending existing, non-agricultural diversification activities whether on or off farm/croft by the agricultural business or the immediate family.
Training linked to projects undertaken with ABDS assistance.
Marketing associated with diversification activities assisted under the ABDS.
1.1.3 What is meant by Restructuring/Reorientation?
Changes to scale or nature of agricultural business e.g. significantly increasing; ceasing or reducing production of an agricultural commodity, and/or moving into another; or increasing the quality of production.
Significant change to business practice e.g. to increase both labour and financial efficiency, viability, quality etc, improve animal welfare, bring about environmental improvements (e.g. improved health and safety, handling and storage of waste).
1.1.4 In what geographic area does ABDS operate?
ABDS operates throughout the Highlands and Islands Special Transitional Programme area.
1.2 ELIGIBILITY
1.2.1 Who is eligible to apply?
You can apply to the Scheme if you are a farmer or crofter, or a partnership or body corporate and are operating an eligible agricultural business in the Highlands and Islands Special Transitional Programme area. If only part of your agricultural business is within the Highlands and Islands Special Transitional Programme area you should contact your local SEERAD Area Office who will advise on your eligibility under ABDS.
Immediate family members, living on or adjacent to the agricultural unit, are also eligible to apply for non-agricultural diversification projects. Immediate family members mean father, mother, husband, wife, partner, son, daughter, step-son, step-daughter, brother, sister.
1.2.2 What is an eligible agricultural business?
The eligibility criteria which were used to define an eligible business under Integrated Administration Control System (IACS)-related schemes will still be used to determine the eligibility of the agricultural business. All eligible agricultural businesses without a Business Reference Number (BRN) will have one allocated for ABDS purposes.
Agriculture includes horticulture; seed growing; the breeding of livestock for food, fur, skins, wool or for use in farming the land (excluding horses or other equines kept for food); the use of land as grazing land or meadow land; and the use of land for woodlands where that use is ancillary to the farming of land or other agricultural purposes.
1.2.3 How long must I have operated an agricultural business to be classed as eligible?
The agricultural business must have been actively operating for a minimum period of two years immediately prior to application.
1.2.4 How can I Demonstrate Agricultural Activity?
The eligible business should demonstrate agricultural activity through the provision of financial accounts covering the two year period
prior to application.
1.2.5 Can I apply if I am a part-time farmer or crofter?
Yes provided you are running an eligible agricultural business.
1.2.6 Can I apply if I am a tenant?
Yes, but remember that you may require to notify your landlord of your proposals. You should ensure that your tenancy agreement will not be adversely affected, or that the tenancy does not contain any conditions which may affect your ability to comply with the Scheme regulations, if your proposal is approved.
1.3 LEVEL AND RATE OF GRANT ASSISTANCE AVAILABLE
1.3.1 What level of grant assistance is available?
The ABDS is a discretionary and competitive scheme. Approved projects for Investments in Holdings and Agricultural Diversification may be offered grant of up to 50% in Less-Favoured Areas (LFA) and up to 40% in non-LFA based on eligible expenditure. For non-agricultural diversification projects grant of up to 50% may be offered. All offers are subject to the maximum grant ceiling of £40,000 per agricultural business.
Assistance to the agricultural business, to the immediate family and any share of a collaborative venture will be aggregated to count towards the ceiling of £40,000.
An independent professional's fees for preparation of a Business Plan, which is approved for ABDS purposes, may be reimbursed at 50% subject to a maximum payment of £400. Where works costing less than £10,000 are likely to be identified, the applicant may prepare the Business Plan. A fixed fee of £100 may be payable.
1.3.2 What level of grant assistance is available in a collaborative project?
In the case of a collaborative project, the grant rate under ABDS is up to 50% LFA and 40% non-LFA for investment in holdings and for agricultural diversification and 50% for non-agricultural diversification. Any assistance for collaborative projects will be divided amongst the collaboration and will count towards the overall ceiling of £40,000 for each eligible business.
1.4 PROJECT TYPES ELIGIBLE FOR ASSISTANCE
1.4.1 What types of projects are eligible?
Assistance can be provided towards the cost of a wide range of projects carried out by the eligible agricultural business or members of the immediate farming family.
Assistance is available for investments in agricultural holdings and diversification.
Investments in Agricultural Holdings:
Provision or upgrading of:-
livestock accommodation;
storage sheds;
systems for storage and disposal of agricultural waste, where a full waste management plan is agreed and implemented;
electricity supplies;
water supplies;
fanks and dippers;
stock handling facilities for cattle;
hard standings for livestock;
information technology to improve agricultural business effectiveness.
Diversification
The list of activities set out below for diversification projects is not prescriptive, and applications for other types of enterprises may be considered provided the criteria of ABDS are met.
Alternative Agricultural Production (Agricultural Diversification)
The development or improvement of facilities required for the production of alternative crops, for example: soft fruit, vegetables, mushrooms or horticultural stock.
The establishment or improvement of alternative stock breeding and rearing enterprises, for example: deer, fibre goats, rabbits, snails.
New and innovative uses of land.
Leisure, Recreation and Sporting Facilities
The establishment or improvement of a wide range of sports and recreational pursuits, both indoor and outdoor, for example: football, water-sports, tennis, golf, pony-trekking, mountain-bikes, martial arts, table tennis, snooker, pitch and putt.
The establishment or improvement of recreational facilities, for example: walks, nature trails, picnic areas, farm museums, ponds for angling.
Retailing of Processed Agricultural Products
The development or improvement of enterprises such as retail outlets and farm shops, geared to the sale of food products, for example: pies, cheese, yoghurt, bread, ham, frozen fruit, bakery etc.
The development or improvement of enterprises geared to manufacture and sale of non-food products, for example: wool, hides and skin.
Processing of Forest Products
The development or improvement of enterprises geared to processing and manufacture of timber products, for example: fencing materials, wooden flooring and garden fencing.
The drying and preparation of timber for woodturning and other craft activities.
Residential Letting
Note: Housing for rent does not include rent to a member of the immediate family of the eligible applicant.
Rural Services
The establishment or improvement of a wide range of small businesses to serve the local community such as: the construction trade, machinery repairs, fencing, hairdressing, catering, knitwear, secretarial services, IT services and specialist contracting work.
Tourist Accommodation
The development of new or improvement of existing tourism accommodation, including most types of permanent accommodation and caravan sites, including access roads, site shops and recreational facilities, for tourists or visitors.
Note: Applicants will be required to provide written evidence of local market need for the accommodation facility and ensure the development is consistent with local tourist strategies. Applicants will also be required to provide a marketing plan. The accommodation should comply with specific VisitScotland or equivalent quality assurance standards.
Tourist Facilities
The development of or improvement of Adventure Playgrounds, Heritage Trails, Farm Museums, Craft Enterprises and Visitor Centres and other tourist facilities.
1.5 PROJECT TYPES NOT ELIGIBLE FOR ASSISTANCE
1.5.1 Are there any projects that are considered ineligible?
Projects relating to aquaculture, processing of agricultural products and the manufacturing or marketing of products which imitate or substitute milk products, for example soya, will not be eligible.
1.5.2 Are grading facilities eligible under ABDS?
Where your proposal is for grading activities e.g. potato grading, and is related solely to your own production, applications may be considered under the Agricultural Business Development Scheme.
Collaborative ventures for grading activities, involving the produce of more than one producer, should be submitted under the Processing and Marketing Scheme. All enquiries should be addressed to the Scheme Co-ordinator, Processing and Marketing Scheme, Longman House, 28 Longman Road, Inverness IV1 1SF tel. no: 01463-253065
1.6 PROJECT EXPENDITURE ELIGIBLE FOR ASSISTANCE
1.6.1 What types of costs are eligible for Diversification Projects?
To be eligible for financial assistance, work must be of a capital nature i.e. reasonably durable, not temporary or makeshift. The cost of routine maintenance works or the repair due to wear and tear is not eligible for assistance.
Provision, alteration, enlargement or reconditioning of permanent buildings, including adaptation or improvement of redundant buildings and related structures, for other economic activity, but not for sale.
Capital works for workshops, office accommodation, stores and the provision of washing and toilet facilities.
Capital works for the establishment of alternative agricultural production (deer, fibre goats, snails etc).
Land preparation works required to establish a horticultural enterprise.
Land preparation and capital works towards development of new and innovative uses of land.
Provision and installation of fixed equipment and machinery.
Note: the cost of domestic cookers and refrigerators etc will not be eligible but permanently fixed equipment such as freezing and cold storage facilities or commercial cookers will be eligible.
Provision of mobile machinery, where it is considered an integral part of the project.
Provision of IT equipment, where it is considered an integral part of the project.
Provision or improvement of facilities for the supply of electricity, water, gas or heating oil.
Provision or improvement of drainage or the treatment of waste generated by the project.
Provision or improvement of access roads, paths, fences, car parks, bridges and jetties being provided as part of a non-agricultural diversification project.
Provision of nursery stock for propagation and initial provision of livestock including provision of animals for use in interpretive centres, wildlife parks or other similar facilities.
Provision of boats or rafts for use other than commercial fishing.
Initial provision of horses or ponies for pony-trekking or other activities or fish for managed waters (amenity fishing).
Marketing & promotional expenditure including:
Promotional Material: Printed or photographic promotional aids including sales brochures, leaflets, labelling, packaging, design, point-of-sale material and promotional video.
Advertising: Where advertising is identified within a promotional strategy, then costs specifically relating to the proposed project may be considered.
Trade Shows: Attendance as an exhibitor at a relevant and approved trade or consumer show. Eligible costs include stand space and structure, temporary carpeting, furniture hire, electrics, graphics, refrigeration hire, freight/carriage and interpreter costs for overseas events only.
Educational and Sales Visits: Visits aimed at increasing businesses' awareness of current trends and developments. Eligible costs may include travel and subsistence, course fees and event entry charges.
Marketing assistance is not available in isolation, but should form an integral part of the strategy for the development and viability of a diversification project, which is to be assisted under the ABDS.
1.7 PROVISION OF TRAINING
1.7.1 Is the cost of training eligible?
Yes. However, assistance in respect of training is
not available in isolation, but is available to maximise the benefits from approved capital investments in agricultural holdings and diversification projects under the ABDS.
Financial assistance of up to 50% may be offered to applicants and employees for specific training in agricultural skills and diversification business management skills.
1.7.2 What procedure do I follow to obtain relevant training?
The need for training should be identified in the Business Plan for the agricultural business or the Business Plan part of the diversification project application. The PAC will consider the relevance of the training and decide if approval will be given to undertake the course. They may also consider if further training should be undertaken. These courses will be included in the Approval Document. It is the Applicant's responsibility to source the training but the Scheme Co-ordinator in Inverness may be able to give advice on the availability.
1.7.3 Is it necessary to complete all the training courses?
Completion of the courses identified in the Approval Document will be a condition of any grant assistance. If a training requirement is included in the approval conditions full assistance will only be paid for capital works when satisfactory evidence of successful completion of the training course is provided. If an interim financial payment is made for capital works and the training is not carried out financial assistance may be recovered.
1.7.4 When must the training be undertaken?
The training should be completed within the timescale set out in the Approval Document.
1.7.5 Is the grant assistance for training in addition to the maximum grant of £40,000?
Yes.
1.8 GOOD FARMING PRACTICE
1.8.1 Do Good Farming Guidelines apply to ABDS?
Yes. The agricultural business on which the application is based must comply with the Guidance on Good Farming Practice (GFP). Details of the guidance are included in Annex 1 of this booklet
1.8.2 What happens if the agricultural business breaches GFP
If the agricultural business has received grant action may be taken to recover all the assistance paid. Where grant has been paid to a family member for a diversification project SEERAD will consider each case on an individual basis to decide what action is appropriate.
1.9 OTHER SCHEME RULES
1.9.1 Can my project operate outwith the Highlands and Islands Special Transitional Programme area?
The project must be based within the Highlands and Islands Special Transitional Programme area but the business may trade outwith the area.
1.9.2 Can my project be based outwith the eligible agricultural holding?
Investments in Holdings and Agricultural Diversification projects must be based on an eligible person's eligible agricultural holding. Non-agricultural diversification projects may be based on or off holding.
1.9.3 Are fees for statutory consents eligible for financial assistance?
Yes. Fees incurred for planning approval and other statutory consents are eligible items in the costs of a project.
1.9.4 Do I have to obtain planning approval or other statutory consents prior to submitting an application?
It is not obligatory that statutory consents are obtained before an application is submitted. If the business proposal is considered favourably and consents have not been obtained any offer of grant will be subject to such consents being obtained. The Approval Document may set a timescale for securing any consent considered necessary. It should be borne in mind that following the approval date the period for obtaining consents, carrying out the work and submitting your final claim is 18 months.
Note: If Planning Approval or other statutory consent has been obtained prior to the submission of an application, the fees for these will only be deemed eligible if your application is approved and the project satisfactorily completed. Similarly where consents are obtained between application and approval dates fees will only be eligible for assistance if the project is satisfactorily completed.
1.9.5 What professional fees are eligible?
Essential professional fees i.e.: Surveyor, Architect, Engineer are eligible.
Ineligible professional fees include costs incurred through consultants' advice in the preparation of your application except for the preparation of the Business Plan for the Agricultural Business.
1.9.6 Can I apply to any other publicly funded body for financial assistance towards my project?
No grant or loan may be sought from any other Government Department or publicly funded body or agency for items assisted under the ABDS.
1.9.7 Can I target my project at a specific type of person?
In order to qualify for financial assistance you must confirm that your project provides equal opportunities for all. There must be no inequality between women and men as well as other equality issues such as ethnic origin, religion or belief, disability, age, sexual orientation or geographical location.
1.9.8 Publicity
In the event that your project receives financial assistance, you are required to acknowledge, in any future publicity, that the funding has been received through the scheme and to give consent to the SEERAD publicising the detail of the award of grant, should it so wish.
1.10 STATUTORY REQUIREMENTS, CONSENTS, AND AGREEMENTS
1.10.1 Do I need to obtain any statutory consents etc?
It is your responsibility to comply with any statutory requirements which apply to any works carried out, including local bylaws, and the appropriate standards. You are also responsible for obtaining any necessary wayleaves, servitudes, consents or agreements. Failure to do so may mean that financial assistance will not be paid.
The statutory and other requirements which must be observed and the nature of any consents or agreement needed will depend in individual circumstances. Guidance is at Annex 2.
1.10.2 How many people must be involved in a collaborative project?
A minimum of three eligible persons, each linked to separate eligible businesses, may make a collaborative application.
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