New £110m rural grant: What it means for farmers

Funding from the grant is intended for small business capital projects and community infrastructure
Funding from the grant is intended for small business capital projects and community infrastructure

The government has announced that there is to be £110 million of new funding made available to rural businesses through the Rural England Prosperity Fund (Rural Fund).

The successor to the former LEADER funding, the fund will be for small businesses, such as farming enterprise, to help strengthen the rural economy.

With an anticipated funding period of April 2023 to March 2025, farmers and land managers are being urged to consider their options.

Tracey Jackson, associate director for H&H Land & Estates, discusses the prospects of the grant and what it might mean for them.

“LEADER was funded with money from the EU through the Rural Development Programme for England, and it offered farmers the opportunity to claim funding for diversification purposes," she explained.

"When new Rural Fund opens, it gives farmers the opportunity to tap into a new stream of funding to help them with opportunities to add additional income streams to their existing farming enterprise.

"As a result of the considerable funding, I am sure we will see innovative initiatives being brought forward and to fruition as a result."

For the purposes of this grant, the government have defined a rural area as towns, villages, or hamlets with populations below 10,000.

It will also be available to ‘hub’ and market towns with populations of up to 30,000 if they serve the wider countryside area with services or employment.

And allocations will be delivered by local authorities. The process will consider the population, the importance of farming in the area, in addition to rural businesses in the area and their productivity.

As BPS and other funding streams are to be reduced going forward, farmers are being encouraged to look opportunities to diversify their business to help make it more robust for the future.

If farmers are looking to diversify with a new project, tapping into the Rural Fund would help to subsidise costs, Ms Jackson explained.

"The opportunities offered by the Rural Grant are plentiful and I think that for the allocated areas there will be many farms and businesses vying for a portion of the grant."

The fund has been designed to support the prosperity and productivity in areas that need it the most and can be considered a ‘top-up’ of the existing UK Shared Prosperity Fund (UKSPF).

It has been specifically set to help overcome some of the challenges that are faced by rural areas for example, poorer connectivity, limited access to key services and lower productivity rates.

The ultimate aim of the grant is to strengthen the rural economy and the communities as well as improve the productivity of these areas.

Funding from the grant is intended for small business capital projects and community infrastructure, it will support new and existing rural businesses to develop products and services that will be of benefit to the wider community and or the local economy.

This can include farm diversifications such as creating a farm shop or a wedding business on the farm that diversifies the income streams and creates jobs.

Improvements and support for community infrastructures are also available where they provide essential services and assets that serve to the benefit of their local community.

Ms Jackson said: "It is important to note that the funding provided by this grant is not available to cover revenue costs and is designed to be spent on long-term projects that will benefit the rural community or business.

"This fund also sits alongside existing Defra schemes including the Farming in Protected Landscapes Programme and the Farming Investment Fund, although the Rural Fund cannot be used in addition to other funding received from Defra schemes."

She said potential applicants should consider whether their investment goals contribute to the government's net zero and environmental targets.

"Proposed projects that offer the greatest environmental, social, and economic benefits should be prioritised," Ms Jackson said.