Wednesday, 7 March 2012

Rural Economy Grant (REG) launched

Rural economy grants, which could be worth more than £1 million each, will enable entrepreneurs in rural areas to take life-changing opportunities to grow their businesses through the Rural Economy Grant scheme, increasing both their competitiveness and profits.
The Rural Economy Grant (REG) provides grants to enable a significant ‘game-changing', transformational performance in farm, forestry, tourism, agri-food businesses and micro businesses in rural areas in England.

The £60 million REG has been established in response to the findings of Defra's Rural Economy Growth Review (launched in November 2011), which through consultation and an in-depth analysis of a broad range of research, identified large grants (of £25,000 up to circa £1 million) are needed in key business sectors to unlock significant rural economic growth potential.

Project applications will need to demonstrate that as a result of a grant their business will achieve a significant step change in performance (such as job creation, increased turnover, access to new markets etc).  The REG application process is competitive and those projects offering the greatest return on grant investment will be more likely to be successful.

Investment in the Forestry Sector

This priority within REG can offer a range of support to help the forestry and timber sector to significantly transform their business competitiveness, productivity and environmental
efficiency, whilst better utilising forest resources to strengthen and respond to market demand for products such as woodfuel.  Projects in woodlands with significant local importance where active management can positively increase its sustainability and develop its economic potential will also be eligible for support.

Support for primary processing associated with the above must demonstrate significant increases in economic and environmental efficiencies in forestry and timber micro-enterprises (businesses with less than 10 employees with an annual turnover or annual balance sheet total of under €2 million).

The focus will be larger scale projects (projects with a total investment above £62,500 and grant request of at least £25,000) that can demonstrate that the investment will move the business significantly beyond current practice.

Grant investment is available to support:
  • Creation/development of new businesses in the forestry and timber sector
  • The modernisation of primary processing
  • The use of new technology in micro-enterprises
  • Product and market development and product ‘substitution’ in favour of timber and promotes great use of locally sourced timber
  • Developing business capacity in micro-enterprises producing high quality woodfuel

Investment through RDPE does not substitute grant opportunities that should be pursued through other existing grant schemes such as the Woodfuel WIG or the Renewable Heat Incentive (RHI).

Primary Processing is defined as all activity post felling but before industrial processing (for example logs, rough planked or chipped timber or simple enhancements to the quality of that product through drying/seasoning). Industrial processing is defined as anything that changes the primary product (for example lamination, pelletising, jointing etc).

Three main themes are being considered under the Forestry Priority for REG:

A. The Modernisation of Supply Chains

Up to 40% of eligible costs can be supported to improve the co-operation and collaboration in the sector leading to more effective and sustainable supply chains.  Support will facilitate:
  •  Co-operation and collaboration to improve supply chains
  • The development of ideas and initiatives that improve the effectiveness and sustainability of supply chains
  • The development of new or established supply chain relationships that increase the
  • environmental efficiency and sustainability of the business
  • An increase in the sector’s ability to address
B. The Development of New Products and Markets

Up to 40% of eligible costs can be applied for to support businesses that want to work together to develop new products, processes or technologies with the aim of strengthening the sector. Support will facilitate: 
  • Increasing the use of timber as a substitute for less sustainable materials
  • Increasing the number of products that use lower grades of timber
  • Increasing the contribution of timber products in adapting to climate change
C. The Development of the Market for High Quality Woodfuel

Up to 40% of eligible costs can be applied for to support woodland owners and woodfuel businesses to produce a clean, efficient and renewable energy source, Support will facilitate:
  • Increasing the supply and quality of both wood chip and fire log woodfuel
  • Increasing the use of wood fuel sourced on and for use on farm/holdings
  • Increasing the amount of woodland in sustainable management
  • Generating sustainable and energy efficient woodfuel businesses

Support for Primary Processing Equipment to deliver against the themes
The minimum REG grant award is £25,000 and a maximum of up to 40% can be applied for.
In all cases applicants for primary processing equipment must be able to demonstrate that they are micro-enterprises, seeking to significantly transform their business and that the project can clearly demonstrate it is addressing a high level/strategic need within REG.

Eligible Primary Processing Equipment:
  • Timber processors and harvesting heads for primary processing use
  • Tractor mounted chippers
  • Self propelled chippers
  • Tractor mounted firewood processors
  • Mobile saw bench
  • Tractor mounted forestry grabs/tongs
  • Low impact equipment and equipment that addresses difficult terrain
  • Forwarders
  • Forestry trailers

Round 1 - Outline Application (Deadline 5pm, 30 April 2012)
This initial stage allows you to provide us with an outline of your project, detailing how you anticipate it will fit with the overall aims of the appropriate theme (farm competiveness, agri-food, tourism, forestry, and micro-enterprise), the need and demand for the investment, and benefits of your project.

Full Application

If your Outline application is endorsed, you will be invited to submit a Full application. The Full application is a more in-depth stage - requiring the submission of a full business case / business plan and supporting evidence to demonstrate the need and demand, impact, value for money and deliverability of your project and how it will make a game changing difference to your business and local economy. You will also need to provide three like-for-like quotations for all project costs.

Who Can Apply?

The following businesses across England are eligible to apply (please see section 7 of the
Applicant Handbook for further details):
  • Farmers
  • Rural based enterprises
  • Forestry contractors
  • Woodland owners
  • Horticultural businesses
  • Rural Growth Networks
  • Not for Profit/ Companies Limited by Guarantee
For support contact:
South East RDPE delivery team:

01932 357083

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