Citation, commencement and extent

1.-(1) This Scheme may be cited as the Farm Business Non-Capital Grant Scheme 1988 and shall come into force on 1st August 1988.

(2) This Scheme shall apply to Great Britain.

Interpretation

2.-(1) In this Scheme, unless the context otherwise requires-

"agriculture" and cognate expressions shall be construed, except in relation to Scotland, in accordance with section 109 of the Agriculture Act 1947(2) and, in relation to Scotland, in accordance with section 86 of the Agriculture (Scotland) Act 1948(3);

"agricultural business" means a business consisting in, or such part of a business as consists in, the pursuit of agriculture;

"the appropriate Minister"-

"approved" means approved by the appropriate Minister and"approve" and"approval" shall be construed accordingly;

"company" means a company as defined in section 735(1) of the Companies Act 1985(4);

"co-operative" means a registered society as defined in section 74 of the Industrial and Provident Societies Act 1965(5);

"designated maps" means-

"eligible group" has the meaning assigned to that expression in paragraph 4;

"eligible person" has the meaning assigned to that expression in paragraph 3;

"farm-based industry" means-

"farm shop" means a shop primarily used for the sale of the produce of the agricultural business of which the shop forms part;

"feasibility study plan" means a plan to study the feasibility of producing a new product on, or supplying a new service from, the land on which the agricultural business or specified farm business is carried on by an eligible person or by each member of an eligible group, by means of-

"food processing" means the application of any process or treatment to agricultural produce for the purposes of human consumption but does not include-

"less-favoured area" means land which is within the area shaded blue or pink on the designated maps;

"livery" means the provision of accommodation and care for horses and ponies;

"marketing plan" means a plan to promote the specified farm business being carried on by an eligible person or by each member of an eligible group or to market, from the land on which the specified farm business is being carried on by an eligible person or by each member of an eligible group, anything produced or supplied in the course of a specified farm business;

"provision of accommodation", in relation to persons, includes provision of facilities for camping and caravanning;

"specified farm business" means any business of a type specified in the Schedule to this Scheme consisting in, or such part of any business as consists in, a business which is carried on by a person who also carries on an agricultural business at the same time and on the same or adjacent land;

"sports" means any game or exercise other than field sports, horse riding and sports involving the use of motor vehicles, firearms or crossbows.

(2) Any reference in this Scheme to a numbered paragraph or"the Schedule" shall, unless the context otherwise requires, be construed as a reference to the paragraph bearing that number in this Scheme or the Schedule to this Scheme.

Eligible persons

3.-(1) Subject to the provisions of this paragraph, the following classes of person shall be eligible for grant under this Scheme-

(a)an individual carrying on an agricultural business if the appropriate Minister is satisfied that that individual or, as the case may be, the farm manager or other person through whom the business is carried on-

(i)derives more than half of his annual income calculated in accordance with sub-paragraph (2) below from that busines and any specified farm business; and

(ii)spends not less than 1,100 hours per year in agricultural activities relating to that business; and

(iii)possesses sufficient agricultural skill and competence, in that he holds an appropriate certificate issued by a teaching establishment recognised for this purpose by that Minister or has been engaged in agricultural activities for not less than five years,

and if the individual carrying on that agricultural business submits a feasibility study plan or a marketing plan in accordance with paragraph 5;

(b)any person representing a body carrying on an agricultural business if-

(i)the appropriate Minister is satisfied that the main purpose of that business is the pursuit of agriculture and that the farm manager or other person through whom the business is carried on satisfies the requirements as to income, hours spent in agricultural activities and as to agricultural skill and competence, as specified in sub-paragraph (1)(a) above, and

(ii)the said person representing the said body submits on behalf of the said body a feasibility study plan or a marketing plan in accordance with paragraph 5;

(c)persons carrying on an agricultural business in partnership if-

(i)the appropriate Minister is satisfied that the farm manager or other person through whom the business is carried on satisfies the requirements as to income, hours spent in agricultural activities and as to agricultural skill and competence as specified in sub-paragraph (1)(a) above, and

(ii)a feasibility study plan or a marketing plan is submitted in accordance with paragraph 5;

(d)the owner of land occupied for the purposes of the pursuit of agriculture who submits a feasibility study plan or a marketing plan relating to such land or to adjacent land jointly with one of the kinds of person eligible for grant under sub-paragraph (a), (b) or (c) above.

(2) For the purpose of this paragraph, a person's annual income shall be calculated in each case by reference to such year or years within the three years immediately preceding the day on which the feasibility study plan or the marketing plan is submitted as the appropriate Minister shall determine, being a year or years which he is satisfied gives or give a fair indication of the normal amount of income of that person and the normal amount of income derived by that person from the agricultural business and any specified farm business.

Eligible groups

4.-(1) Subject to the provisions of this paragraph a group shall be eligible for grant under this Scheme provided that-

(a)it consists of three or more members each carrying on an agricultural business;

(b)a minimum of seventy-five per cent of the members are eligible persons at the time when the feasibility study plan or the marketing plan is submitted to the appropriate Minister for approval in accordance with paragraph 5;

(c)that part, if any, of the membership which is not comprised of eligible persons does not include a company or a co-operative;

(d)a feasibility study plan or a marketing plan is submitted in accordance with paragraph 5 by a member of the group.

(2) A group consisting of ten or more members which satisfies the conditions specified in sub-paragraph (1) above shall nevertheless not be eligible for grant under this Scheme if each of the members also carries on a business involving food processing or the purification, carbonation and bottling of spring water.

Feasibility study plans and marketing plans

5.-(1) The appropriate Minister shall not approve proposed expenditure for the purposes of grant under this Scheme unless a feasibility study plan or a marketing plan relating to that expenditure is submitted for the approval of that Minister and is approved by him and may make such approval subject to such conditions as he shall determine.

(2) A feasibility study plan and a marketing plan submitted for approval shall be set out in such form as the appropriate Minister may from time to time specify and the person or group submitting the plan shall furnish all such particulars and information relating thereto as the appropriate Minister may specify.

(3) Without prejudice to sub-paragraph (2) above, the person or group submitting a feasibility study plan or a marketing plan for approval shall furnish-

(a)sufficient information to show that that person or group is an eligible person or eligible group;

(b)details of the establishment, expansion or promotion of the specified farm business or agricultural business to which the plan relates and of any product or service to be marketed in accordance with the plan;

(c)an indication of the measures to be taken to achieve the aim of the plan;

(d)a statement of the name, qualifications and relevant experience of the person to be employed or contracted to implement the plan;

(e)a written statement by the person referred to in sub-paragraph (3)(d) above, unless that person is an employee of the eligible person or eligible group, of the expenditure, within paragraph 8(1)(a), to be incurred in carrying out the plan.

(4) The duration of a marketing plan shall be such period as is specified in the plan, being a period not less than three years from the date of approval of the plan.

Restrictions on approval of feasibility study plans and marketing plans

6. The appropriate Minister shall not approve for the purposes of grant a feasibility study plan or a marketing plan in so far as-

(a)such a plan includes-

(i)proposed expenditure which would in aggregate result in the payment of grant under this Scheme of less than £250 in respect of a feasibility study plan or less than £250 during a period of any one year in respect of a marketing plan;

(ii)proposed expenditure in relation to the provision of horses and ponies for hire outside a less-favoured area;

(iii)proposed expenditure in relation to any activity in respect of a specified farm business or agricultural business which the eligible person or eligible group has previously carried out and, in particular, in relation to the employment of, or the contracting for the services of, any person to promote a specified farm business or to market a product of, or a service supplied by, a specified farm business where the eligible person or eligible group has previously employed, or contracted for the services of, any person to promote the same specified farm business or to market the same product of, or service supplied by, that specified farm business;

(b)the person nominated to implement the plan under paragraph 5(3)(d) is not-

(i)a member of an organisation recognised from time to time by that Minister for the purposes of this Scheme; or

(ii)a suitable person to implement the plan, in the opinion of that Minister, having regard, in particular, to his qualifications and relevant experience;

(c)the plan which is submitted is a marketing plan and a payment of grant under this Scheme in respect of such a plan has previously been made to the eligible person or eligible group responsible for submitting the plan, or to any person being a member of that eligible group or to any other eligible group of which such a person has been a member, within the period of three years immediately prior to the receipt of the plan by that Minister;

(d)the plan which is submitted is a feasibility study plan, and a payment of grant under this Scheme has previously been made in respect of such a plan in the circumstances and within the period specified in sub-paragraph (c) above unless the eligible person or eligible group responsible for submitting the plan has-

(i)previously withdrawn from carrying out a feasibility study plan under paragraph 7(3) and received a payment of grant in accordance with that paragraph, or

(ii)previously fully completed the carrying out of such a plan and received a payment of grant in accordance with this Scheme in circumstances where the person nominated to implement the plan under paragraph 5(3)(d) has made a declaration in writing to the eligible person or eligible group, at the time of completion of the plan, to the effect that the production of the new product or the supply of the new service to which the plan relates is not feasible;

(e)the eligible person or eligible group responsible for submitting a feasibility study plan, or any person being a member of that group, or any other eligible group of which such a person has previously been a member, has, within the period of three years immediately prior to the receipt of the plan by that Minister, received a payment of grant in respect of such a plan having at any time previously also received a payment of grant in the circumstances specified in sub-paragraph (d)(i) or (ii) above.

Variation and withdrawal of feasibility study plans and marketing plans

7.-(1) For the purposes of this Scheme and in respect of an approved feasibility study plan, the appropriate Minister may, at any time, upon the written request of the eligible person or eligible group responsible for submitting the plan, permit that person or group to withdraw from carrying out the plan.

(2) Where an eligible person or eligible group has withdrawn from carrying out a feasibility study plan under sub-paragraph (1) above, the appropriate Minister shall not make a payment of grant in respect of expenditure incurred in respect of that plan and the eligible person may, at any time, submit a different feasibility study plan or the same plan to that Minister for approval.

(3) If the eligible person or eligible group responsible for submitting the feasibility study plan submits to the appropriate Minister a declaration in writing made by the person nominated to implement that plan under paragraph 5(3)(d) to the effect that the production of the new product or the supply of the new service to which the plan relates will not be feasible and that no further work can usefully be undertaken pursuant to the plan, that Minister may permit that person or group to withdraw from carrying out the plan and may make a payment of grant, subject to the provisions of this Scheme, in respect of expenditure which has been incurred at the time of the said declaration.

(4) For the purposes of this Scheme and in respect of an approved marketing plan, the appropriate Minister-

(a)may, upon the written request of the eligible person or eligible group responsible for submitting the plan, permit a variation thereto provided that-

(i)the written request is made simultaneously with the application for payment of grant, in accordance with conditions specified pursuant to paragraph 11, and is made after the period of one year from the commencement of the plan, and

(ii)the additional expenditure, if any, to be incurred as a result of the variation does not exceed the total expenditure specified, in accordance with paragraph 5, in respect of the marketing plan originally approved by a percentage rate to be determined by that Minister from time to time;

(b)shall, at any time, upon the written request of the eligible person or eligible group responsible for submitting the plan, permit that person or group to withdraw from carrying out the plan.

(5) Where an eligible person or eligible group has withdrawn from carrying out a marketing plan under sub-paragraph (4)(b) above-

(a)the appropriate Minister shall, upon a claim made by that person in accordance with conditions specified pursuant to paragraph 11, make a payment of grant, subject to the provisions of this Scheme, in respect of expenditure which has been incurred at the time of the withdrawal;

(b)that person or group may, provided that no payment of grant has been made under sub-paragraph (5)(a), submit a differrent marketing plan or the same plan to the appropriate Minister for approval.

Farm business grants

8.-(1) Subject to the provisions of this Scheme, the appropriate Minister may make to any eligible person or eligible group a grant towards expenditure incurred by that person or group being expenditure which-

(a)has been incurred for the purposes of, or in connection with-

(i)carrying out a feasibility study plan which has been approved by that Minister;

(ii)carrying out a marketing plan which has been approved by that Minister, by means of the employment of, or contract for the services of, a person to promote a specified farm business, to market anything produced or supplied in the course of a specified farm business or to design or print material the object of which is to promote a specified farm business or to market any product or service of a specified farm business; and

(b)appears to the appropriate Minister to be neither expenditure of a capital nature nor expenditure which would fall to be treated for the purposes of section 29 of the Agriculture Act 1970(8) as incurred in connection with expenditure of a capital nature; and

(c)appears to the appropriate Minister to be necessary or appropriate for the purposes of an approved feasibility study plan or marketing plan; and

(d)has not been incurred in connection with any item of expenditure notified to the eligible person or eligible group by the appropriate Minister at the time of approval of the feasibility study plan or marketing plan as an item of expenditure in respect of which that Minister will not make a payment of grant under this Scheme.

(2) The appropriate Minister may make the payment of grant under sub-paragraph (1) above subject to such conditions as he sees fit, and in particular may require that the person currently responsible for the carrying on of the specified farm business or the agricultural business in respect of which the expenditure has been incurred shall furnish to that Minister such documents, or copies thereof, relating to the carrying out of a feasibility study plan or marketing plan as that Minister may determine at any time not exceeding three years after the completion of such a plan.

(3) Where it appears to the appropriate Minister that expenditure in respect of which grant is claimed under sub-paragraph (1) above, has been incurred partly for purposes which are eligible for grant under that sub-paragraph and partly for purposes which are not so eligible, that Minister may for the purposes of grant under that sub-paragraph treat as having been incurred for the purposes which are so eligible so much of that expenditure as appears to that Minister to be referable to those eligible purposes.

Amounts of grant

9.-(1) Subject to the provisions of this paragraph and paragraph 12 the amount of grant payable under paragraph 8(1) towards expenditure in respect of-

(a)a feasibility study plan shall be-

(i)fifty per cent of the expenditure specified in the feasibility study plan or of the actual expenditure incurred in carrying out the plan whichever is less, and

(ii)subject to a maximum of £3,000 in respect of an eligible person and £10,000 in respect of an eligible group;

(b)the employment of, or a contract for the services of, a person to promote a specified farm business, to market anything produced or supplied in the course of a specified farm business or to design or print material the object of which is to promote a specified farm business or to market any product or service of a specified farm business shall be-

(i)forty per cent of the expenditure specified in the marketing plan or in any varied plan in respect of the first year thereof, thirty per cent of the expenditure so specified in respect of the second year and twenty per cent of the expenditure specified in respect of the third year, or the equivalent percentages of the expenditure actually incurred in the respective years, whichever is less, and

(ii)subject to a maximum of £3,000 per annum in respect of an eligible person and £10,000 per annum in respect of an eligible group.

(2) The expenditure referred to in paragraph 8(1)(a)(ii) in respect of which the appropriate Minister may make a grant shall be restricted to the salary and National Insurance contributions paid in respect of the employment of any person or the fees paid in respect of a contract for the services of any person.

(3) The appropriate Minister shall not make a grant in respect of any expenditure which is claimed in respect of any work or service-

(a)which has been carried out or performed prior to the approval of the feasibility study plan or marketing plan; or

(b)which has not been carried out or performed at the time of the claim.

Financial limits

10.-(1) When by reason of the total of applications for approval of plans under paragraph 5(1), for the purpose of grant under this Scheme, which already have been approved or received, the appropriate Minister is at any time of the opinion that the financial resources which should be made available for payment of grant under this Scheme during any period will be insufficient to satisfy the payments of grants in relation to England, Wales or Scotland as the case may be during the same period resulting from the approval of further applications, he may decide-

(a)that he will not accept any further applications for consideration under this Scheme until a time subsequently specified by that Minister;

(b)that he will cease to approve existing applications.

(2) A decision by the appropriate Minister under sub-paragraph(1) above may relate to applications-

(a)for grant under this Scheme towards expenditure of such kind as he shall determine; or

(b)for any grant under this Scheme;

and in the case of a decision not to accept further applications and to specify a time when further applications may be accepted shall be published by notice in the London or Edinburgh Gazette, as appropriate.

Claims for grant

11. Any claims for grant under this Scheme shall be made in such form and manner, at such times and in respect of such periods as the appropriate Minister may from time to time require, and the claimant for grant shall furnish all such particulars and information relating to the claim and copies of such documents and records relating thereto as that Minister may require.

Reduction or withholding of grant

12.-(1) The appropriate Minister may reduce or withhold any grant payable under this Scheme where-

(a)assistance in respect of expenditure towards which such grant is claimed has been given otherwise than under this Scheme, or

(b)he considers that the expenditure towards which such grant is claimed is excessive having regard to the work carried out or the services provided, or

(c)in respect of a marketing plan, the carrying out of the work or the provision of the services towards the expenditure on which such grant is claimed has been effected in a way which appears to that Minister to have destroyed or damaged the natural beauty and amenity of the countryside to an extent which cannot be justified by any resulting benefit to any agricultural business or specified farm business.

(2) Before reducing or withholding any grant under the provisions of sub-paragraph (1)(b) or (c) above which would otherwise have been payable to an eligible person or eligible group, the appropriate Minister shall-

(a)give to any such person or group a written notification of the reasons for the action proposed to be taken by that Minister, and

(b)afford that person or group an opportunity of appearing before and being heard by a person appointed for the purpose by the appropriate Minister, and

(c)consider the report by a person so appointed and supply a copy of that report to the person or group mentioned in sub-paragraph (a) above.

Revocation of approval and recovery of grant

13. If at any time after the appropriate Minister has approved a feasibility study plan or marketing plan or paid a grant under this Scheme it appears to that Minister-

(a)that any condition subject to which the approval was given or the grant has been paid has not been complied with, or

(b)that the eligible person or eligible group responsible for submitting the plan or the claim for grant gave information on any matter relevant to the giving of the approval or the making of the payment which was false or misleading in a material respect,

that Minister may revoke the approval, in whole or in part, and, where any payment has been made, may recover on demand an amount equal to the payment which has been made or such part thereof as that Minister may specify; but before revoking an approval or making a demand under this paragraph that Minister shall-

(i)give to any eligible person or eligible group to whom or to which any payment of grant would be payable or from whom or from which any such amount would be recoverable a written notification of the reasons for the action proposed to be taken by that Minister, and

(ii)afford that person or group an opportunity of appearing before and being heard by a person appointed for the purpose by the appropriate Minister, and

(iii)consider the report by a person so appointed and supply a copy of the report to the person or group mentioned in sub-paragraph (i) above.

Paragraph 2

SCHEDULESPECIFIED FARM BUSINESSES

1. Farm-based industry.

2. Farm shops.

3. Direct sale to farm visitors of fruit and vegetables which the visitors pick themselves.

4. Provision of accommodation, food and drink.

5. Provision of facilities for sports and recreation.

6. Provision of educational facilities relating to farming and the countryside and to farm-based industry.

7. Provision of livery.

8. Provision of horses and ponies for hire.

9. Letting of any land, building or buildings for the purposes of the carrying on of any business of a type specified above.

Explanatory Note

(This Note is not part of the Scheme)

This Scheme, which applies to Great Britain and operates from 1st August 1988, makes provision for aid for the diversification of agricultural businesses in the form of grants in respect of expenditure of a non-capital nature incurred in pursuance of approved feasibility study plans and marketing plans (paragraph 8(1)). Such plans must be concerned with the feasibility of producing a new product or supplying a new service from land on which an agricultural business or a specified farm business is carried on, the promotion of a specified farm business, or the marketing of anything produced or supplied in the course of a specified farm business (paragraph 2(1)). The types of specified farm business to which feasibility study plans and marketing plans may relate are specified in the Schedule.

The kinds of expenditure eligible for grant and the rates of grant are set out (paragraph 9). Grant in relation to the provision of horses and ponies for hire is only available in less-favoured areas (paragraph 6(a)(ii)). Less-favoured areas are defined by reference to designated maps which are available for inspection during normal office hours at the addresses specified in the definition of designated maps (paragraph 2(1)). Copies of the maps may also be inspected during normal office hours at any Regional or Divisional Office of the Ministry of Agriculture, Fisheries and Food, at any Divisional Office of the Welsh Office Agriculture Department and at any Area Office of the Department of Agriculture and Fisheries for Scotland.

The classes of person and group which may benefit from grant are defined (paragraphs 3 and 4). To benefit from assistance, an applicant must submit a feasibility study plan or a marketing plan for approval by the appropriate Minister (paragraph 5).

The Scheme also-

(a)imposes certain restrictions on approval of feasibility study plans and marketing plans (paragraph 6);

(b)provides for the variation and withdrawal of plans (paragraph 7);

(c)enables the appropriate Minister, having regard to the financial resources which should be made available, to cease to approve existing applications and to refuse to accept any further applications for approval until such time as he may determine (paragraph 10);

(d)provides for the reduction or withholding of grant in certain circumstances where it would otherwise be payable (paragraph 12) and for the revocation of the approval of the appropriate Minister and the recovery of grant paid (paragraph 13).