The capital grant scheme element of the Farm Business Improvement Scheme moved forward this week with Agriculture Minister Michelle McIlveen announcing details of the scheme, due to open next month.

Both Tier 1 and Tier 2 will open at the same time, with the initial bid of £40m of capital from the Department of Finance to cover two tranches of the scheme, with the second tranche due in autumn 2017. In total, around £190m of capital is potentially available, but future bids for money from the Finance Department will probably depend on the initial level of interest and uptake in the first two tranches.

The scheme will provide 40% grant funding for both tiers. Tier 1 is aimed at the purchase of equipment and machinery and is for investments costing between £5,000 and £30,000. The list of eligible items for Tier 1 is still to be finalised, and will not be made available until close to when the scheme opens for applications next month.

Part of the delay is a fear that putting out a list now will mean farmers hold off on purchasing equipment, which would have a detrimental impact on equipment suppliers.

According to DAERA, eligible items will be individually reference-priced so that each item will have a maximum amount of grant aid available for it. Presumably, this is to avoid prices of items from suppliers increasing when the scheme opens. Quotes from suppliers will not need to be included in applications. A business plan for Tier 1 applications is included within the application form.

Items in Tier 1 will be banded to encourage applications for higher scoring items “that will deliver greater benefits in sustainability”. If an applicant applies for funding for several items, they will receive selection criteria points based on the lowest band item applied for.

Tier 2 is focused on construction projects and will provide funding of projects costing from £30,000 to an unlimited amount with the maximum grant available set at £250,000. Projects will be assessed on a separate business plan submitted with applications against the scheme themes. These include production efficiency, animal and plant health, resilience to adverse weather, mitigation of climate change and health and safety.

General purpose buildings such as workshops or machinery stores will not be supported. Slurry tanks will be funded under certain circumstances but not to increase current storage capacity for existing livestock, and like-for-like replacement investments, such as re-roofing, will not be supported.

Applicants must have a farm business ID and provide a certificate from an online farm safety self-assessment exercise. The Making it Safer self-assessment takes 10 to 15 minutes to complete and is available at www.farmsafenet.org/Safer. DAERA has sought to reassure applicants that the survey results will not lead to a farm inspection.

There is no 50% grant funding available for young farmers. However, DAERA has said that additional selection points will be awarded to farmers under the age of 40 on 28 October 2016 that are named on farm businesses for Tier 1 applications or head of holding for Tier 2 applications.

Likewise, applicants of any age with at least a level two qualification in agriculture or horticulture, as well as online applications, will receive additional selection points.

The Ulster Farmers’ Union welcomed the launch of the preparation stage of the scheme and again urged DAERA to include funding for fencing within the scheme.