Farming Transformation Fund: Water Management Grant

About the Water Management grant

Detail of what the grant is to be used for

What are the grants for

These grants are for capital items to improve farm productivity through more efficient use of water for irrigation, and to secure water supplies for crop irrigation by the construction of on-farm reservoirs and the adoption of best practice irrigation application equipment. You can find a full list of capital items that are eligible for this scheme in the Eligible costs section.

What the grants are not for

The grants cannot be used to store or distribute mains water or dirty water, or if their primary purpose is to control flooding. You can find a list of costs which are not eligible for this scheme in the Costs which are not eligible.

Priorities for funding

Your project will be scored against the Water Management grant scheme priorities, which are to improve:

  • productivity
  • water sustainability
  • the environment

What Defra are looking for

We are looking for projects that improve farm productivity through more efficient use of water for irrigation and secure water supplies for crop irrigation. For example:

  • introduce more efficient water application (for example, change from rain gun application to trickle or boom application)
  • secure water supply for crop irrigation that enables water use in a more sustainable way (for example, constructing a reservoir and moving away from summer abstraction to rainwater harvesting or peak flow/winter abstraction)
  • help business resilience and prosperity (for example, using new irrigation systems and newly irrigated areas to increase yield/productivity or introduce high value crops)
  • encourage collaboration for example supplying water to neighbouring farmers

How the Farming Transformation Fund grants work

An overview of the Water Resource Management grant – who can apply, what the grants will fund and how much funding is available

Who can apply

Only arable and horticultural businesses growing, or intending to grow, irrigated food crops, ornamentals or forestry nurseries in England can apply for the water management grants.

The land on which these activities take place must be owned by you, or you must have a tenancy agreement in place until 5 years after the project has been completed.

Who cannot apply

The following are not eligible for the grants.

  • Public organisations, including Crown bodies and non-departmental public bodies (NDPBs)
  • Local authorities
  • Members of Producer Organisations under the Fresh Fruit and Vegetables Aid Scheme if they have funding for the same project through their operational programme

How much money you can apply for

For each project, the minimum grant you can apply for is £35,000. The maximum grant is £500,000. Grants can cover up to 40% of the eligible costs of a project. The minimum total eligible cost of a project would therefore be £87,500.

At least 60% of the project costs must be paid for with money from private sources like savings or a bank loan.

You must be able to pay the remaining project costs. You can use loans, overdrafts and certain other grants, such as the Basic Payment Scheme or agri-environment schemes such as the Countryside Stewardship scheme.

You cannot use other public money (for example grant funding from local authorities) towards the project costs. You cannot use this grant to carry out capital works which are required under other agreements.

Paying for the project

Grants are paid in arrears. They can only be claimed after the work being claimed for is finished and has been paid for. We expect you to make a maximum of 3 claims over the course of the project.

Hire-purchase or leased items must be paid off before you claim.

If you buy an item for the project using lease purchase or hire purchase, you must own this outright before you can claim any grant money towards it.

This means that, before you claim the grant, you must:

  • pay all of the instalments
  • show that the title has passed to you

Otherwise, you will not be able to include these costs in your claim.

Do not start work, incur costs (including paying deposits), enter into any legal contracts, or place an order before the project start date in your Grant Funding Agreement. Any expenditure incurred before that date is at your own risk and may make your whole project ineligible.

Eligible Costs

The grant can be used to pay for the following:

Reservoir construction and infrastructure

  • Construction of dam walls
  • Overflow/spillway
  • Synthetic liner
  • Abstraction point including pump
  • Engineer fees for the project that will be incurred after a Grant Funding Agreement is signed (construction engineers only) – as long as these do not add up to more than 15% of the project’s total eligible costs
  • Fencing for synthetically lined reservoir
  • Filtration equipment – including sand or screen filters and UV treatment
  • Irrigation pump(s) and controls
  • Pipework to fill the reservoir
  • Pumphouse
  • Underground water distribution main and hydrants
  • Electricity installation for pumphouse
  • Water meter
  • Water storage tanks (for storing water for irrigation of crops)

Irrigation equipment

  • Boom
  • Trickle
  • Ebb and flow
  • Capillary bed
  • Sprinklers
  • Mist

Technology

  • Software to monitor soil moisture levels and schedule irrigation
  • Software and sensors to optimise water application

Costs which are not eligible

The following are not eligible for grant funding (this list is not exhaustive):

Agricultural business costs:

  • borehole installation
  • the cost of moveable fittings – like metal over-ground irrigation pipes
  • hose reels
  • generators
  • rain guns and rain gun mounts
  • downpipes and gutters
  • diesel powered equipment and machinery
  • buildings used for growing and harvesting agricultural and horticultural products
  • standard agricultural equipment and inputs like animals and crops
  • the cost of agricultural production rights and payment entitlements
  • items that do not have a lifespan of 5 years or more
  • reservoirs or other water storage facilities that will be used for growing rather than irrigating food crops, ornamentals and forestry nurseries for example, hydroponic reservoirs, ebb and flood benches or troughs
  • reservoirs or other water storage facilities that will be used for purposes other than for storing water for irrigating food crops, ornamentals and forestry nurseries, for example storage of water for washing, cleaning, feeding livestock, sport, leisure etc
  • equipment to store or distribute mains water or dirty water, or if their primary purpose is to control flooding

General costs:

  • projects that are carried out only to meet a legal requirement
  • any costs incurred before the project start date shown in the grant funding agreement
  • RPA will not fund projects where water is supplied by summer water surface abstraction or mains
  • contingency costs
  • the cost of getting any permissions, consents or statutory requirements, such as planning permission
  • legal costs
  • supervising engineers and inspecting engineers’ fees
  • any items which you have already had EU or national funding for (or intend to get national funding for)
  • relocation costs – if the business needs to relocate in order to expand, it can only apply for funding for the cost of expansion
  • costs associated with the provision of housing
  • marketing and promotion

Buildings, land and equipment costs:

  • repairs and maintenance of existing buildings, equipment and machinery
  • like-for-like replacement of existing items (such as buildings, equipment and machinery)
  • purchase of machinery or equipment that will not be on the asset register of the business 5 years after completion of the project
  • purchase of land, whether or not this land is built on
  • renewable heat and energy systems

Business running costs:

  • salaries and running costs of the business
  • in-kind contributions (this means the value of donated work or services) such as the cost of using your own labour, vehicle and office space
  • recurring licence fees, subscriptions and service charges
  • computers, software and printers used in the general running of the business, like processing orders or accounts
  • mobile phones

Financial costs:

  • bad debts
  • advance payments
  • insurance policy costs
  • working capital
  • financial charges, such as bank charges, fines and interest
  • costs connected with a leasing contract, such as a lessor’s margin, interest refinancing costs, overheads and insurance charges
  • reclaimable VAT
  • pension provision

Full details of the Water Management Grant, eligibility and application process can be found in the Farming Transformation Fund Water Management Grant Manual.