Scottish Government

1.1 FBDS AND ITS AIMS AND OBJECTIVES

1.1.1 What is the FBDS?

The FBDS is an innovative business development scheme for farmers who operate an eligible business on an agricultural unit and their immediate family members who reside on or adjacent to that agricultural unit. An eligible business means a business, which has been engaged in agriculture on an agricultural unit for a continuous period of two years, ending with the date of the application.

1.1.2 What are the aims and objectives of the FBDS?

The FBDS is designed to assist with:-

• The restructuring or re-orientation of agricultural production by exploitation of new business opportunities, expansion of holding, 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 by the agricultural business.
• Creating new, or extending existing, non-agricultural diversification activities whether on or off farm by the agricultural business or the immediate family.
• Training linked to projects undertaken with FBDS assistance.
• Marketing associated with diversification activities assisted under the FBDS.

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 the FBDS operate?

The Scheme operates in all areas of Scotland, outwith the area covered by the Highlands and Islands Special Transitional Programme.

If you are uncertain if your farm business or your proposed project is located within the eligible area you should consult SEERAD.

1.2 ELIGIBILITY

1.2.1 Who is eligible to apply?

You can apply to the Scheme if you are a farmer, or Partnership, or Body Corporate/Limited Company and, as the legal occupier of an agricultural unit, operate an eligible business on that unit. An agricultural unit means an agricultural holding, or smallholding, (and includes a common grazing), which is located within the FBDS area.

It is also a requirement that the business proposal is located in the FBDS area. If you are uncertain whether you or your business would meet the eligibility requirements, you should contact the SEERAD Area Office who will provide advice.

Immediate family members, resident on or adjacent to the agricultural unit, are also eligible to apply if they are acting with the legal occupier's consent. For the purposes of the Scheme, immediate family members are defined as wife, husband, partner, son, stepson, daughter, stepdaughter, mother, father, brother or sister.

1.2.2 What is an eligible business?

An eligible business means a business, which has been engaged in agriculture on an agricultural unit with the Scheme area for a continuous period of two years or more. The eligible business must demonstrate agricultural activity through, for example the provision of financial accounts covering a two-year period. Paragraph 1.1.1 refers.

Agriculture includes horticulture; fruit growing; seed growing; dairy farming and livestock breeding and keeping; the use of land as grazing land; meadow land; osier land; market gardens and nursery grounds; and the use of land for woodlands, where that use is ancillary to the farming of land for other agricultural purposes.

1.2.3 How long must I have operated my agricultural business to be classed as eligible?

You must have been actively engaged in agriculture for a minimum period of two years immediately prior to the application, as stated in paragraphs 1.1.1 and 1.2.2.

1.2.4 Can I apply if I am a tenant?

Yes, but you may require to notify your landlord of your business proposal, and if applicable, obtain your landlord's approval. 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 business proposal is approved.

1.3 LEVEL AND RATE OF GRANT ASSISTANCE AVAILABLE

1.3.1 What level of grant assistance is available?

The maximum grant assistance will be £30,000 per eligible business, but also refer to paragraphs 1.3.5 and 1.3.6 of this booklet for information on collaborative proposals.

1.3.2 What rate of grant assistance will be applied?

The FBDS is a discretionary and competitive scheme. Projects involving diversification outwith agricultural activities may be offered grant of up to 50% of eligible expenditure. For projects involving Investment in Holding and agricultural diversification, which includes novel and non-traditional crops and livestock, support may be offered to a maximum grant rate of up to 50% of eligible expenditure, for projects within Less Favoured Areas ( LFA's) and up to 40% of eligible expenditure for projects in non- LFA areas.

An independent professional's fees for preparation of a Business Plan, which is approved for FBDS purposes, may be reimbursed at 50% subject to a maximum payment of £400. A fixed fee of £100 may be payable for applicants who prepare there own Business Plan. A Business Plan is required for an application for an Investment in Holding project only.

The Project Assessment Committee ( PAC) will recommend approval or otherwise of the project, and if successful, the appropriate grant rate during the assessment process, based on the business case presented. Before recommending approval the PAC must be convinced that the project would not proceed without public assistance. The PAC will not recommend approval where they consider that the project applied for could be funded from within existing financial resources.

1.3.3 Can I submit more than one application?

Yes, any person deemed eligible may make more than one application, but the total amount of assistance awarded to approved projects will be aggregated and restricted to the maximum grant ceiling available to the eligible business.

1.3.4 What is a collaborative project?

A collaborative project must consist of a group of three or more eligible applicants, each associated with a separate eligible farm business with its own farm code. Co-operatives may be assisted, providing all applicants, are linked to separate eligible businesses.

However, financial assistance shall not be given unless each eligible person and each eligible business is actively involved in the collaborative venture.

1.3.5 What level of grant assistance is available in a collaborative project?

The maximum amount of financial assistance payable is £35,000 in respect of each eligible business.

1.3.6 Can I apply for both a single and collaborative project?

Yes. However, the maximum grant under the FBDS which may be available to an eligible business cannot exceed £35,000.

1.4 PROJECT TYPES ELIGIBLE FOR ASSISTANCE

1.4.1 What types of projects are eligible under the FBDS?

The FBDS can provide assistance towards the cost of diversification projects and investments in an agricultural holding.

1.4.2. Diversification

Agricultural diversification projects must be based on an eligible person's agricultural holding. The measures under which this assistance is available are outlined below. The examples listed are indicative only. If your proposal is not shown, you should contact the SEERAD Area Office to determine eligibility, prior to submission of an application.

Alternative Agricultural Production (Agricultural Diversification)

Leisure, Recreation and Sporting Facilities

Retailing of Processed Agricultural Products

Processing of Forest Products

Residential Letting

Please note that under this measure, housing for rent does not include rent to a member of the immediate family of the eligible applicant submitting the business proposal.

Rural Services

Tourist Accommodation

Applicants applying under this category will be required to demonstrate local market need for the accommodation facility and ensure the development is consistent with local tourist strategies. The accommodation should comply with specific VisitScotland or equivalent quality assurance standards.

Tourist Facilities

1.4.3 Investments in Agricultural Holding:

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.

* For all other items capable of producing waste it will be necessary to complete a form of waste management plan, to be agreed with the SEERAD office.

All Investment in Holding projects must be based on a eligible person's agricultural unit.

New eligible measures may be introduced over the duration of the Scheme. Equally, some eligible measures may be withdrawn. You should always check the latest position with the SEERAD Area Office before applying.

1.5 PROJECT EXPENDITURE ELIGIBLE FOR ASSISTANCE

1.5.1 What types of project costs are eligible for Diversification Projects?

To be eligible for financial assistance, work must be of a capital nature, be reasonably durable, not temporary or makeshift. The cost of routine maintenance works or the repair of normal wear and tear on items are not eligible for assistance.

The list of activities set out below is not prescriptive. Applications for other types of enterprises may be considered provided the criteria of the FBDS are met. Eligible items of expenditure include:

• 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.
• Land preparation works required for the establishment of horticultural enterprises, including land improvements.
• 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 other white goods will not be accepted but permanently fixed equipment such as freezing and cold storage facilities, bakery equipment or commercial cookers may be eligible .

• Provision of mobile machinery, where it is considered an integral part of the proposed enterprise.
• Provision of IT equipment, where it is considered an integral part of the proposed enterprise.
• Provision or improvement of facilities for the supply of electricity, gas, heating oil or water for the enterprise.
• Provision or improvement of drainage or the treatment of waste generated by the enterprise.
• Provision or improvement of access roads, paths, fences, car parks, bridges and jetties required in connection with the enterprise, and also including landscaping.
• Provision of nursery stock for propagation and initial provision of livestock for breeding, including provision of animals for use in interpretative centres, wildlife parks or other similar facilities.
• Provision of boats or rafts for use other than commercial fishing.
• Provision of horses or ponies for pony-trekking or other activities or fish for managed waters (amenity fishing only).

1.5.2 Marketing and 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 event. Eligible costs may 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 - Educational work and sales 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 FBDS.

1.5.3 Are fees for statutory consents eligible for financial assistance?

Yes. Fees incurred for planning approval and other statutory consents (architects, surveyors and engineers) are eligible items within the costs of the project. These costs are restricted to 12% or less of the overall project costs.

Fees for accountants or consultants engaged in the preparation of the application are not eligible except for the preparation of the Business Plan for the agricultural business, see paragraph 1.3.2.

1.6 PROJECT TYPES NOT ELIGIBLE FOR ASSISTANCE

1.6.1 Are there any projects that would be considered ineligible?

Projects relating to aquaculture and the manufacture and marketing of products which imitate or substitute milk and milk products, for example: soya, and also the processing and marketing of sugar (but not including confectionery, jam making, etc.) will not be eligible under the FBDS.

Projects relating to the processing and marketing of agricultural products for human consumption may be eligible for assistance under a separate scheme, the Processing and Marketing Grants Scheme. Details are available from the SEERAD Area Office/Area Project Manager.

1.7 PROVISION OF TRAINING

1.7.1 Is training an eligible cost under the FBDS?

Yes. A grant of up to 50% of eligible costs may be offered to applicants and employees for specific training in order to ensure the success of an approved project. Applicants are required to submit projected training costs, which may be approved at the discretion of the PAC.

Note: Assistance in respect of training is not available in isolation, but training is available to maximise the benefits from approved capital investment in diversification project(s) assisted by the FBDS.

1.7.2 What procedure do I follow to obtain relevant training?

Applicants should complete the training needs section within the FBDS Application Form. Details of the training course(s) and the cost of the training must also be supplied by the applicant.

If further specific training is considered necessary by the PAC to maximise the benefits of the approved diversified project, the onus will be on the applicant to source and identify relevant course(s) and to consider alternative funding sources, where possible. This will be in consultation with SEERAD.

1.7.3. Is it necessary to complete all the training courses?

Completion of the training course(s) identified in the Approval Document will be a condition of any grant assistance, up to 75% of grant assistance only will be paid until satisfactory evidence of successful completion of the training course(s) is provided.

1.7.4 How long do I have to complete the training?

Training should be completed within the time-scale set in the Approval Document.

1.7.5 Is the grant assistance for training in addition to the maximum grant ceiling for an eligible business?

Yes.

1.8 OTHER SCHEME RULES

1.8.1 Can my business proposal operate outwith the FBDS area?

The project must be based within the FBDS area. However, the business may trade outwith the FBDS area. Agricultural diversification & Investment in Holding projects must be based on an eligible person's agricultural holding. Non-agricultural diversification projects may be based on or off the agricultural holding.

1.8.2 Do I have to obtain planning approval or other statutory consents prior to submitting an application?

No. It is not obligatory that statutory consents be obtained before an application is submitted. However, it is recommended that applicants undertake an initial consultation with their local Planning Department prior to submission of an Application Form. If the business proposal is successful it will be approved subject to such consents being obtained, prior to any capital works commencing.

If Planning Approval or other statutory consents have been obtained prior to the submission of an application, any fees incurred will only be deemed eligible if the PAC recommends your application for approval.

1.8.3 Can I apply to any other public funding body for financial assistance towards my project?

No. It is a condition of the FBDS that no grant or loan may be sought from any other Government Department or public agency for items assisted under the scheme.

1.8.4 If my business proposal is approved, will the project be monitored?

Yes. General progress with the development of the project, and expected benefits derived from the project, will be subject to monitoring. The monitoring will commence from the date of the final claim and will continue for a period of 5 years, or 7 years in the case of residential letting. During this period, any problems you encounter must be notified to SEERAD.

The monitoring period will be linked to the projected financial year-end of the business, as stated in your Application Form. Annual Monitor Forms will be issued at an appropriate time-scale after a financial year-end, to allow time for preparation of financial accounts relative to the business.

1.8.5 What will happen if I do not attain the expected benefits, cease trading or sell the business funded through the FBDS?

You should inform SEERAD immediately if there are any material changes in your project. The information you supply will be assessed and considered by SEERAD, depending on the circumstances you may be asked to repay in part, or in full, any financial assistance paid. Annex B (General Conditions) refers.

1.8.6 Do Good Farming Guidelines apply to FBDS?

Yes. The agricultural business on which the application is based must comply with the Guidance on Good Farming Practice ( GFP). Details of the guidance is included in Annex 1 of this booklet.

1.8.7 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 STATUTORY REQUIREMENTS, CONSENTS AND AGREEMENTS

1.9.1 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 bye-laws, 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 on individual circumstances. For further information on statutory requirements, refer to Annex A of this booklet. The list provided is not exhaustive, but is intended to provide some examples.

1.9.2 Equal Opportunities

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.

1.9.3 Release of Information

The Scottish Executive is bound by the terms of the Data Protection Act 1998, the Freedom of Information (Scotland) Act 2002 and the Environmental Information (Scotland) Regulations 2004.

It is the policy of the Scottish Executive to release information about the amounts of grant and subsidy for the new Single Farm Payments Scheme and the new schemes under the framework of the Rural Development Regulation including FBDS. We will process personal data we receive in line with the Data Protection Act 1998, but applicants should be aware that this information will generally be disclosed.

We will also protect other personal data we receive in line with the Data Protection Act 1998. We will use the data provided in the FBDS application primarily for the purpose of processing and evaluating the application, which may involve the disclosure of personal data to a Project Assessment Committee ( PAC). However, personal data may also be used subject to the safeguards of the 1998 Act for purposes connected with:

• Monitoring and evaluation of Scottish Rural Development Plan ( SRDP) and related grant schemes;
• Administration of the Common Agricultural Policy;
• The production and safety of food;
• Management of land and other environmental controls;
• Provision of services to businesses;
• Animal health and welfare; and
• Occupational health and welfare.

Data may be passed (when necessary for these purposes) to other bodies. For example to HM Customs & Excise for import or export purposes, or to local authorities for milk or health purposes. Data may also be used for statistical purposes, not identifying individuals, which may reduce the need for some statistical data collection. It may also be used, where necessary, to comply with the Freedom of Information (Scotland) Act or the Environmental Information (Scotland) Regulations noted above.