Round up of grants for rural businesses

Posted: 18th April 2016

Article by journalist Helen Babbs

Originally published in Smallholder April 2016

Grants for Smallholders?

Helen Babbs takes a look at what schemes are available throughout the UK.

Speak to smallholders about funding and there are nearly as many ways as there are smallholders. But one which doesn’t feature very often is grants. Most people feel grants and subsidies are just not for them: the paperwork is too complicated; the rules are too limiting; and the whole system is for much bigger farms with hundreds of acres. But while it is true some grants are definitely for the large-scale enterprise, is there anything out there suited to smallholders?

Basic Payment Scheme

The simplest and most universal rural grant scheme in the UK is the Basic Payment Scheme (formerly Single Farm Payment). This is the base-line EU agricultural subsidy open to all farmers with 5 hectares (3 hectares in Scotland) or more of active agricultural land. Farmers are defined as anyone raising or growing agricultural products, thus including smallholders, even if they don’t sell their produce. “Active” land may be arable, permanent grassland, or permanent crops such as short-rotation coppice, but not established woodland or hard surfacing, farm buildings, etc. To be eligible, farmers must comply with the Cross Compliance Regulations, a series of rules for basic good farming practice in terms of environmental care and animal welfare. On holdings greater than 10 hectares, some “greening” measures for benefiting on-farm wildlife and improving biodiversity, such as restoring hedges or planting nitrogen-fixing crops, are now compulsory.

Payment is made per hectare, at a rate set annually by the European Commission. For England and Wales in 2015, this was £180/ha. Scottish payments are a little more complicated, as the rate varies with land productivity. Good quality agricultural land received £150 per hectare, while designated Less Favoured Areas, such as open moorland, received £10-20 per hectare.

Contact: Rural Payments Service:

Countryside Stewardship

This is the English scheme for promoting sustainable land management. Like the BPS, it is open to all farmers with arable, grassland, or permanent crops, but there is no minimum land area. Instead, CS involves lists of environmentally friendly management options and one-off “capital works,” from which the farmer selects a combination to suit their farm. Each farmer’s proposed package of works is then assessed by Natural England against the conservation priorities in the local area, by an online scoring system. The highest scoring proposals, ie with greatest benefit to the local environment, are accepted for a five year binding agreement to carry out the works. Detailed management and livestock record keeping is required, backed up by on-farm inspections.

Funding is itemised as an annual value for each management option, in a sort of agricultural shopping list! For example, maintaining multi-species grassland is worth £115 per hectare per year, while planting a native species hedge is worth £11.60 per metre. Although there is no minimum land area, the agreed work must be worth a minimum value of £5000, apart from where only one-off capital work is being done, when the minimum is £1000. For smallholders with only a hectare (2.5 acres) or less, this level may not be reachable, but for those with several hectares, joining the CS scheme could be a valuable route to developing their holdings. As uptake of CS by larger, mainstream farms has so far been quite low following the introduction of compulsory “Greening” measures in BPS, smaller-scale smallholder packages are probably more likely to be accepted.

The environment stewardship schemes in Wales (Glastir) and Scotland (Agri-environment-climate scheme) follow the same method as the English scheme. Glastir requires a minimum of 3 hectares, although a Small Grants scheme aimed at smaller holdings is to be piloted later in 2016. The Scottish scheme has two management options specifically for “Small Units” of under 30 hectares: “Conservation management,” with a selection of simple measures to support farmland birds, plants and insects who do better on the small-scale mosaic of fields typical on a smallholding (£77/ha); and “Cattle Management,” for the keeping of native or traditional cattle breeds such as Ayrshire or Belted Galloways (£160/heifer).


Organic conversion and management

Many smallholders change to certified organic production to increase the value of their smallholding products, but organic growing also has additional government grant funding. This is administered under the environmental stewardship schemes. Unlike the rest of the Countryside Stewardship agreements, the organic sector is not competitive: anyone with a holding registered with an official UK organic certifying body, such as the Soil Association, is eligible to claim.

The grants take the form of a five year agreement, either two years of conversion payments followed by three years of organic management payments, or simply five years of management payments for those already fully converted to official organic status. Conversion payments are higher, to cover the costs of transition. For example, grassland under conversion is worth £75/ha, then £40/ha once converted. Organic funding can be claimed in addition to the Basic Payment Scheme, where the holding is large enough.

Contact: as for Environmental Stewardship schemes above, or

  • The Soil Association: 0117 914 2412; www.soilassociation.orgContact: The Loraine Trust, Greencombe, Porlock, Somerset, TA24 8NU
  • An independent trust body, The Loraine Trust, also offers an annual grant scheme for fully certified organic farms and smallholdings with an annual income of less than £24,000. These grants are for projects designed to benefit both the holding and the wildlife on it, with up to £2500 available. The farm will receive a visit from the trust inspectors to assess the quality of management, as well as the benefits of the proposed project. Successful farms then have a follow-up visit a year later.

Woodland grants

Woodland is not included as agricultural land in the Basic Payment Scheme, but it has its own specific grant funding. In England and Wales this, like the organic sector, is administered under the environmental stewardship schemes by the same online scoring methods, with the highest-scoring proposals receiving funding. For woodland-only applications, any land owners are eligible, not just “active farmers”. The minimum eligible land area is 0.25 hectares (0.66 acres).

Woodland grants may be for establishing new woodland, or maintenance of existing woodland. For new woods, agreements are for 13 years: 1 year planting and 12 years after-care with payments at different rates over this timespan. For example, in 2015 “enhanced mixed woodland” received £3600/ha for planting, followed by a £60/ha annual maintenance payment. Farmland which is converted to woodland becomes ineligible for BPS payments, but will receive a further “premium” for the loss of agricultural income (£350/ha in 2015).

In Scotland, the separate Forestry Grant scheme has a “Small or farm woodland” option aimed at smaller holdings. This offers £2400/ha for planting new woodland and £400/ha per year for subsequent maintenance over 5 years. There are also separate capital costs grants to cover fencing, tree protection, etc. Application involves drawing up a Woodland Creation Operational Plan, covering the 20 year or more lifespan of the proposed wood, to be assessed by the Forestry Commission authorities.

Contact: as for Environmental Stewardship schemes above.

There are also some local grants available for woodland, administered by County Councils or charitable bodies. One such is the Exmoor Woodland Conservation Fund, run by the Exmoor Society. Open to all land owners within the Exmoor National Park, it offers discretionary grants for the planting and maintenance of woods on Exmoor, along with advice on woodland management.

Contact: The Exmoor Society; 01398 323335;

New Entrants

With the declining numbers and increasing average age of British farmers, there are schemes throughout the UK to promote new entrants into farming. As starting a smallholding is often the hardest point for funding, at least in terms of cash flow, it may well be worth checking if you are eligible. In England, the focus is on young farmers (defined as under 40!), who are entitled to an extra 25% on their BPS subsidies. In Wales, this is expanded into the Young Entrants Support Scheme (YESS), which also offers grants to improve farm infrastructure.

Contact: YESS, 0300 062 2175; e-mail:

In Scotland, there is a similar Young Farmers Start-up Grant scheme, aimed at farmers aged 16-40 with agricultural qualifications or 5 years experience, working 3 or more hectares. A full five year business plan must be submitted, demonstrating future outputs by Year 4 of £7,750–£460,000. Successful applicants will receive grants up to £54,000. Perhaps more relevant to most smallholders is the separate New Entrants start-up grant scheme, with a flat rate £11,500 grant. Eligible “entrants” must be over 16 years old and have not been head of a farm before – keeping an allotment doesn’t count! A minimum of 3 hectares of land is required, with a detailed 4 year business plan to show a £450-7700 output could be achieved. Regular inspections will take place over the four years, to ensure the business plan is being followed.

Contact: 0300 300 2222;

Business development

For smallholding-based businesses, EU-funded rural development grants are available. These are organised via the LEADER programme, which funds projects aiming at increased farm and forestry productivity, diversification, rural tourism, small/micro enterprises, and improved rural services. Application is open to anyone living in a rural community, and involves developing a detailed business plan, which is then assessed by the county-scale Local Action Group. Grants are worth up to £50-100,000, usually to cover 40% of the project costs. The remainder must be made up from private funding.

All this sounds terribly technical and complex, but I know personally of several smallholders who have obtained LEADER funding straightforwardly for some fairly simple smallholding businesses. One family makes cider from a restored orchard, with the grant funding going towards the cost of a new fruit press.

Contact: your Local Action Group


If your smallholding is within an area with on-going conservation work, it may be possible to benefit from some of the charity-funded grant schemes. National Parks in England are currently running Landscape Partnership Schemes with Heritage Lottery funding, to enhance and conserve valuable landscape features. These include grants for landowners to carry out conservation work on selected habitats, which vary with the area. On Dartmoor, funds are available for stone-wall restoration, while the New Forest “Nature’s Stepping Stones” project priorities include scrub removal and controlling non-native plant species. A similar set of schemes are due to be announced later in 2016 for Areas of Outstanding Natural Beauty.

For further details, see:

On a smaller scale, the Peoples’ Trust for Endangered Species has a Small grant scheme as part of their Traditional Orchard Project. This aims to encourage replanting of gaps within traditional orchards, by providing either rootstocks and grafting material kits to propagate varieties already in the orchard, or funds for planting traditional varieties from specified suppliers. The grant will cover up to 4 trees per quarter acre of existing orchard, and is open to any owner or manager of an existing traditional orchard.

Contact: People’s Trust for Endangered Species; 020 7498 4533;

In Somerset, the Farming and Wildlife Advisory Group South West is also offering Orchard Grants, for the planting and management of traditional orchards. These are open to land owners or community groups, with each proposal being considered on an individual basis. Funding is £20 per tree, up to a total of £500, and all trees must be properly staked and protected.

Contact: 01823 355663;

So is there a grant for you?

There may not be a grant scheme specifically for smallholders, but there is actually quite a bit of money out there for which smallholders are eligible. And, those smallholders who have got grants all agree that while the process may seem daunting, the grant itself was often just the boost of capital – and confidence – their smallholding needed. Why not give it a try?

Rural Grant Case Study

Pedigree Angoras

CAseStudy1Joanna Beswick runs Kingcraft Farm, a 45-acre small farm of permanent pasture and woodland, with around 130 angora goats. The farm is in the Basic Payment Scheme and has just joined the Mid Tier Countryside Stewardship scheme as well.

“We were in the original Countryside Stewardship Scheme for 10 years,” Jo explains, “and this allowed a number of hedging and orchard planting schemes to take place. This was very useful in the early days of my ownership, although stipulations against harrowing and rolling pasture were rather difficult to get used to, especially as we then ran a small thoroughbred stud with horses grazing the land, and they are notoriously bad grazers. It remains to be seen how onerous the Mid Tier scheme may be – it seems to require lots of photos, soil analyses and drainage maps.”

Previously, Jo also had a one-off grant from the Worcestershire Traditional Orchards Scheme. “This allowed me to replace those orchard trees which had succumbed to goat attack (I had to resort to barbed wire on my 12′ x 12′ orchard guards to keep the rascals out) and also to acquire more rigid weldmesh tree guards.”

The grants are obviously good for the farm then, although the goats may differ in this view of being fenced off the tasty apple trees! But what about the smallholder? Jo agrees grants can live up to their reputation of having a lot of paperwork, but feels they are still a good thing. “The Stewardship Schemes do seem to involve pages and pages of detailed instructions, but on the practical level they only really need me to manage my land as I have been doing anyway. They are an important part of my farm income: if you compare the time spent on paperwork to the time spent sorting mohair fleeces they are worthwhile.”

Kingcraft Farm ~ Pedigree Angoras may be contacted at: The Lodge, Chambers Court, Longdon, Tewkesbury, Glos, GL20 6AS; Tel: 01684 833338 or 07973 267 111