Guidance

About the Water Management Grant Round 2, who can apply and what the grant can pay for

Updated 22 April 2024

Applies to England

You can apply for a grant for:

• capital items to improve farm productivity through more efficient use of water for irrigation
• securing water supplies for crop irrigation by constructing on farm reservoirs which will store abstracted water or harvested rainwater
• the use of best practice irrigation equipment

The Rural Payments Agency (RPA) will prioritise funding for projects that improve:

• productivity
• water sustainability
• the environment

The more your project meets the grant’s funding priorities, the higher your application will score.

Who can apply

You can apply for a grant if you’re an arable or horticultural business in England, growing or intending to grow:

• irrigated food crops
• ornamentals or forestry nurseries

About the business

The grant funded assets must be located in England. The grant does not apply to any joint business or partnership based in Northern Ireland.

If your grant funded asset is mobile, you’ll have to store and keep it in England when not in use.

The land on which the grant-funded asset is installed or built must either:

• be owned by the applicant business
• have a tenancy agreement between the applicant business and the landowner in place until 5 years after the project is completed

Who cannot apply

The following groups are not eligible for a grant:

• 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
• businesses who will not use any of the water stored to grow and irrigate their own crops for example, by supplying other businesses with all of the stored water and not using any of it for growing and irrigating their own crops

What the grant can pay for

If you’re eligible, you can get a grant to pay for capital items for a project to help you to improve farm productivity through more efficient use of water and secure water supplies for crop irrigation.

You can find a full list of capital items that are eligible for the grant in the Eligible costs section.

Eligible capital items include equipment to:

• introduce more efficient water application, (for example, by changing 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 winter peak flow surface abstraction)
• improve business resilience and prosperity (for example, using new irrigation systems and newly irrigated areas to increase productivity or introduce high value crops and/or moving away from fossil fuel powered equipment)
• encourage collaboration for water storage and irrigation of crops (for example supplying water to neighbouring farmers)

Eligible costs

The grant can be used to pay for only the following items as part of your project. This list covers all the items which are eligible for grant funding.

Reservoir construction and infrastructure

You can use the grant to pay for:

• abstraction point including pump
• construction of reservoir walls
• electricity installation for pumphouse
• fencing for synthetically lined reservoir
• filtration equipment - including sand or screen filters and UV treatment
• irrigation pump(s) and controls
• overflow/spillway
• pipework to fill the reservoir
• pumphouse
• synthetic liner
• underground water distribution main and hydrants
• water meter
• water tanks to store abstracted water or harvested rainwater for irrigation of crops

Upgrading the electricity supply to the holding or installing a new connection to the electricity grid for a pumphouse is eligible (as long as this doesn’t add up to more than 10% of the project’s total eligible costs). However, the eligible cost must be related to the project that will be undertaken. For example, if the project requires 100 kW of electrical supply and the new supply is 200 kW, only half of the cost would be eligible. There needs to be clear detailed evidence of the power requirement of the project in the full application.

If you are responsible for a reservoir, you need to know about the reservoir safety requirements that are aimed at preventing loss of life and damages from uncontrolled releases of water. The government is considering reforms to the regime requirements.

Irrigation equipment

You can use the grant to install irrigation equipment such as:

• boom
• capillary bed
• ebb and flow
• mist
• sprinklers
• trickle

Technology

You can use the grant to install:

• equipment to monitor soil moisture levels and schedule irrigation

• equipment and sensors to best use water application

What the grant cannot pay for

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

Agricultural business costs

The grant will not cover agricultural costs, such as:

• projects that introduce or increase the use of water supplied by summer water surface abstraction or mains
• borehole installation
• projects that do not deliver an increase in productivity for the applicant business
• the cost of moveable items, like metal over-ground irrigation pipes and moveable pumphouses
• hose reels
• generators
• rain guns and rain gun mounts
• downpipes, gutters and surfaces from which rainwater is harvested, for example, roofs, mats and trays
• diesel powered equipment and machinery
• buildings or equipment 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
• equipment to store fertiliser and other crop nutrients
• items that do not have a lifespan of 5 years or more
• reservoirs or other water storage facilities that will be used for growing food crops, ornamentals and forestry nurseries rather than irrigation, for example, hydroponic reservoirs, ebb and flood benches or troughs and associated water capture and recirculation
• 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
• equipment to store, clean or distribute dirty water, recycled water or water that has been used for irrigation and will be reused
• equipment with a main use to control flooding
• hand watering equipment

General costs

The grant will not cover general costs, such as:

• projects that are carried out only to meet a legal requirement
• any costs incurred before you have accepted a grant funding agreement (GFA) and reached the project start date shown in the GFA
• contingency costs
• the cost of getting any permissions, consents or statutory requirements, such as planning permission or abstraction licences
• legal costs
• engineers’ fees
• project management fees
• any items which you have already had EU or national funding for (or intend to get national funding for)
• moving costs – if the business needs to relocate so it can 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

The grant will not cover buildings, land and equipment costs, such as:

• 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

The grant will not cover business running costs, such as:

• 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 monthly or annual 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

The grant will not cover financial costs, such as:

• 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

How the grant works

The grant is competitive, so RPA will score your application against the funding priorities. RPA will award a grant to the highest scoring applications.

You’ll need to follow a 2-stage application process.

Stage 1: To check if you’re eligible and how well your project fits the funding priorities using an online checker - your ‘online application’.

Stage 2: If you’re eligible and your project scores highly enough against the funding priorities, you’ll get an application form and project number to make a ‘full application’.

Read the How to apply guidance before you apply.

If your full application is eligible and scores highly enough, RPA will offer you a grant.

The grant will open for Stage 1 online applications on 19 April and closes at 23.59pm on 12 July 2023.

How much money you can apply for

The minimum grant you can apply for is £35,000 (40% of £87,500). The maximum grant for Water Management is £500,000 per applicant business per round of funding.

Grants can cover up to a maximum rate of 40% of the eligible costs of a project. At least 60% of the project costs must be paid for with money from private sources like savings or a bank loan.

You need to be able to pay the remaining project costs. You can use loans, overdrafts and certain other monies, for example the Basic Payment Scheme or agri-environment schemes such as the Countryside Stewardship scheme. You can also use a loan from your landlord, including Local Authority landlords.

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

When you can claim payment

You must wait until you have accepted a GFA. You must have also reached the project start date shown in your GFA before you:

• start work or commit to any costs (including paying deposits)
• enter into any legal contracts
• place an order

Any project costs incurred prior to this may make your application ineligible, as the project could be considered as already started.

Grants are paid in arrears. You can only claim after the work being claimed for is finished and has been paid for. You can make a maximum of 3 claims over the course of the project.

If you buy an item for the project using lease purchase or hire purchase, you need to own this outright before you can claim any grant money towards it. If you don’t own it outright, you will not be able to include these costs in your claim.

This means that before you claim the grant, you need to:

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