The Great Potential of Biomass
Many farmers are already looking into the opportunities available for growing biomass crops, including corn to produce ethanol from. However, there is a wide range of biomass energy forms. Virtually every type of organic waste and plant can be used to produce power, heat or fuel.
Biomass energy offers real potential for supplying a large portion of the UK’s energy requirements, whilst also revitalising agricultural communities, maximising energy independence and cutting down on pollution. It also offers farmers an attractive business proposition and means that rural communities could, in theory, become wholly self-sufficient in their energy needs by using locally grown biomass crops to fuel their machinery and cars and to power domestic and commercial buildings.
The government is investing in biomass too, with various incentives for development. Money is being pumped into new and emerging technologies by both the private and public sector. There is a wide range of current opportunities in this sector.
Biomass residues, which are left over naturally from agricultural activities, can either be left in the field to recycle nutrients or used to make energy. Other farming wastes can also be used profitably to make energy, including whey gathered from cheese production and the manure produced by livestock.
Energy crops are an obvious biomass choice and biomass loans are already being taken out by forward-thinking farmers keen to diversify their businesses. These crops can be produced in large volumes and they include corn, grasses and trees. The crops are largely perennial and need fewer inputs and less maintenance than ordinary crops, which makes them sustainable and cheap to produce. The use of grasses is becoming popular and many new enterprises are being funded by biomass loans and grant sources where available. Oil plants are also interesting many farmers.
These energy crops can also be used to boost the quality of soil that has previously been over-farmed. Energy crops can have deep-root systems which benefit the soil and add to its organic composition. Tilling will be infrequent and this will minimise machinery usage. Additionally, these perennial energy crops need lower levels of pesticide, fertiliser, fungicide or herbicide than traditional crops and the reduced use of such chemicals helps to preserve the environment. The nature of this type of crop production can also help to encourage beneficial wildlife back into the local environment and increase cross-pollination through natural means.
In short, biomass offers some excellent opportunities and an attractive potential income for farmers who are keen to diversify and grow their businesses in new and profitable ways.
EU CAP Reforms
EU farming unions have united this month to demand that the eurozone’s national governments act to co-finance the funds transfer from the CAP direct payments pillar to the new pillar for rural development.
This declaration has now been signed by the respective presidents of each of the four UK-based unions, alongside their counterparts in Germany, France, Denmark, Belgium, Finland and the Netherlands.
Within the existing scheme, the national governments act to match any funds which are switched from the direct payments (Pillar One) of the Common Agricultural Policy (CAP) to fund rural development schemes for Pillar Two via national modulation. However, in the CAP reform packages for farming finance in February, the EU’s agricultural ministers came to an agreement that up to 15pc could be transferred between the two pillars, without any member state being obliged to provide matched funding.
MEPs will now work to come to a deal with the EU’s ministers on a final reform package for the EU CAP by June. However, they take an opposing view, believing that co-financing for pillar transfers is essential.
This farming finance issue is particularly important for the UK. Owen Paterson, the Defra Secretary of State, has signalled his plan to make use of the full fifteen per cent transfer for modulation to help fund a range of linked agricultural and environmental schemes. This will largely be driven by the fact that Great Britain received the lowest amount of rural development among the EU member states in this year’s budget.
Nigel Miller, the president of NFU Scotland, said that by making it compulsory for governments to commit to co-financing, the movement of funds between Pillar One and Pillar Two would be reduced, cutting the ‘competitive distortion’ that might result between EU member states. He added that co-financing agreements were integral to existing policies for rural development.
He pointed to the fact that Pillar Two had traditionally been accompanied by national co-finance initiatives to ensure that only the most important projects which are deemed as such by the member states themselves – would actually be developed. Many do agree that if member states are forced to co-finance projects for rural development, they will be far more incentivised to make sure they are properly managed because of the national contribution.
The unions have highlighted the impact of the UK’s devastating winter, which proved how vital the Pillar One payments were to the farming community. Farmers, analysts and others within the agricultural community will watch the progression of the EU CAP Reform with keen interest.
Concerned About Meeting Your VAT Bill This Year?
The farming industry has experienced a number of real challenges in the last few years and many farmers are still struggling to get their finances back on track after a terrible winter and the impact of the recent recession. Many will also be experiencing the costs of investing in new technologies to take their businesses forward in the long term. These include renewable technologies, new and more efficient machinery and technology used to diversify the business.
For many of these farmers, the VAT bill can come as a nasty shock. Some simply will not be able to meet it on time without risking their business capital. However, all is not lost in such instances and there are options for those struggling with the prospect of a higher than expected VAT bill.
Options to Defer
HMRC now has limited schemes and cases where it will allow businesses to defer their VAT payments. This is part of a new initiative to support entrepreneurialism within the current context of a struggling economy. In such instances, the business must contact HMRC and speak to their Business Payment Support Services team. This service will not be available if the HMRC has already been in touch with you about any overdue payments, or if you have already reached an agreement to make your payments via instalments. However, if you are experiencing payment problems for the first time, you may find that you are offered the option to pay in instalments. You will not be obliged to give a reason for needing to defer the VAT bill, but the government will show greater sympathy if you do and will be more likely to agree to more favourable terms. Typical acceptable reasons would include the loss of a key customer, unexpected or exceptional expenditure, a delay in payments received or a difficulty in obtaining funding from banking sources.
Specialist Loans
Alternatively, many farmers will opt to take out VAT bill loans to make the payments. Here at Nationwide we have several specialist products that are designed for farmers specifically and will have a number of features geared towards this sector, including flexibility and attractive interest rates. Our specialist finance solutions offer various types of VAT bill loans and one of our business advisors can help you to assess which product is right for you.
Wind Turbines for Farmers – The Benefits
There are some great benefits in installing wind turbines for farmers or landowners, primarily involving the provision of cheap electricity and the possibility of income generation from selling excess energy back to the grid.
Choose Your Provider
A wind-power service provider can help you to decide on the right turbine for your land – one that is suitable for your needs. They can also provide guidance on installation and conduct a site survey. Additional guidance is also available on dealing with the planning process with your local authority and negotiating with utility companies. The provider will also usually install the turbine, commission it and then provide a series of post-installation maintenance and service contract options. Some of these service providers work with a range of renewable energies and others specialise solely in wind power, so assess reputation, feedback, experience and quality accreditations before appointing your supplier.
Counting the Benefits
If you own a sheep, poultry or dairy farm, which has the land required to house a wind turbine, then you have the potential of generating your own energy by using wind power. These turbines are linked directly to your existing electricity mains supply so that the energy generated by wind can immediately be used and reduce your need for a mains supply. If you produce an excess of energy, you can sell it back to your supplier via the Feed-in Tariffs scheme, which effectively provides a subsidy for this type of renewable technology.
Farms with dairy herds will find that wind turbines greatly reduce their electricity bill for milking machinery and lighting. Sheep farmers may prefer to export their wind-turbine-generated electricity and receive the income instead. Poultry farmers can benefit from both worlds and guarantee availability of supply.
Different Types of Turbine
As the wind-turbine market grows, the range of turbines available is increasing and the cost of the technology is slowly coming down. There are also some attractive packages for wind turbine finance available, so that you can benefit quickly. As well as wind turbine finance for direct purchases, some companies offer options for part-ownership and leasing, depending on your requirements. Speak to one of our farm finance account managers for further details about the options available for you and conditions of eligibility. If you have land that currently isn’t being used to generate income, then a wind turbine could be an interesting investment and valuable source of additional future income.
A Guide to Biomass for Farmers
If you’re a farmer looking to diversify, then you no doubt will have heard about opportunities to invest in this alternative energy source and seen adverts for attractive biomass funding deals. But what exactly is it? This guide will get you started.
The term ‘biomass’ refers to biological organisms which are either living or were recently alive. Within this context of energy production, this can include organic waste, crops, trees and other plants.
Opportunities an a Global Scale
Biomass has become increasingly popular as a source of energy in the past decade and significant funding is being put into this sector by both the public and private sectors. The idea is to help mitigate environmental concerns, find cost-effective ways to produce non-fossil fuels and to ensure energy security for the UK.
High Potential in the UK
The UK is lagging slightly behind, though. Already in some countries, biomass produces nearly 20pc of their national energy needs. From the EU as a whole, the figure is less positive – only 3.7pc in 2012 – but growing rapidly. Countries such as Finland and Sweden are leading the way.
Typical Biomass Sources
The most common type of biomass material is wood, which can either be burned to generate heat or used to make steam and turn electricity turbines. Other categories include energy crops such as sugars and oils which can produce bio-ethanol as an alternative to gasoline. Agricultural residues, such as straw or other things left over from harvesting can also be used. Food waste and industrial wastes can be sources of biomass. Other examples include whey from diary production and even human waste, which produces methane gas to make heat and electricity.
Environmental Impacts
Biomass is classed as a ‘lean’ carbon fuel – which means that it only produces a small fraction of the CO2 emissions that fossil fuels do and so provides a more beneficial balance to the environment. However, there are arguments against biofuel and some critics have argued that the land which is used to grow biofuel crops might be better used to grow food for developing nations. However, it’s vital to reduce CO2 emissions to protect the environment and another benefit is that biomass fuels can be sourced locally, which benefits small-scale farmers and growers.
Funding and Finance
There is a range of specialist biomass funding opportunities currently available to farmers keen to branch out into this emerging and interesting field. Contact one of our renewable specialist account managers for more information and to assess the opportunities available.
Why Might You Choose to Take Out a Farm Loan?
British farming has a long and proud industry, with many of our products being known across the world for their quality and provenance. A rise in demand for locally produced and organic foods is also offering new opportunities for entrepreneurial farmers and others with land to spare are looking at a broad range of second-income options such as wind farms and camp sites.
Financing a New Farm Venture
But as with most business ventures, finance is often required to get a project off the ground. This is where an agricultural loan comes in. This is a specialist loan product that is targeted at farmers and their particular needs. The agricultural loan might be to purchase a capital item or to restructure an existing finance product. Generally, these loans will be offered by specialist providers. They have favourable terms and conditions for eligible applicants, including rapid cash transfers and a high acceptance rate. Refinancing on machinery can also be attractive for tax reasons.
The Most Common Reasons for Applying for a Farm Loan Here are some of the common reasons why farmers take out an agricultural loan to take their business to the next level.
They might need finance for machinery and specialist equipment, whether new or pre-owned. They might need loans to buy feed, fertiliser, seed or supplies for crop protection, depending on their business plan and farming conditions.
One-off loans are a popular way to purchase land that becomes available next to the farmer’s property and which offers expansion potential. And similarly, financing will commonly be used to cover the cost of new sheds, barns or other farm buildings.
Some farmers look for interim finance to tide them over. Others are looking for a cash boost if they are tenant farmers and get the opportunity to buy a sitting tenancy.
Financing is also available for machinery. This can anything from off-road vehicles and tractors to specialist equipment and seasonal items. Additionally, there are products which will facilitate the purchase of new livestock.
What to Look for in a Farm Finance Provider Signs of a good provider of farming loans will include an attractive interest rate, clear and transparent loan terms which are favourable to the farmer and his or her business and a demonstrable knowledge of the agriculture industry. Options for finance restructuring, rapid acceptance and transfers and the possibility of flexibility in the future are also greatly valued by the farming community.
The Future of Renewable Energy
Some interesting discussion points and views were aired at the recent New Energy Summit, which was scheduled to coincide with Earth Day.
Designed for the strategists, innovators and leaders working at the pinnacle of the energy sector, the invite-only event focused on ROI, which relates both to financial returns and a call for ‘resiliency, optionality and intelligence’.
The fact is that investment in renewables has been strongly affected by the economic downturn and the corresponding lack of funding for innovation and technological development. However, at the press conference during the BNEF summit, Guy Turner, who directs New Energy Finance in London, forecast a 3.5pc surge in the world’s economy within 25 years and great investment opportunities. He stated that the highest-growth countries would be found in less developed regions, with North Africa, the Middle East and Asia having excellent potential for renewables.
The summit agreed that extra storage investment and back-up and transmission systems would drive the new generation of investment in renewables, with underlying technology costs expected to drop and new product penetration expected to rise. In Europe, a poor economy combined with efficiency improvements are expected to lead to a reduction in the usage of fossil fuels.
Resiliency and energy security were also key themes, with issues about energy prices, cyber-security, supply and demand and information systems being raised as key concerns. Climate change was highlighted as a continuing focal point.
In the post-summit interview, Michael Liebreich explained that the realities of energy provision had been dragged sharply into focus in the last two years, with a substantial revolution now occurring in the energy markets. He pointed to a return to economic growth in the developing world, with falling use of energy. He also spoke about cheap and clean energy sources supported by renewable energy finance, combined with the difficulty of forecasting in an ever-changing world. Nuancing was a key point, both in terms of energy strategies and supporting technologies. He commended energy pioneers and discussed the diversity of renewable delivery and the opportunities for entrepreneurs wishing to enter the sector.
For those working in the sector today, or wishing to invest in renewables, such conferences provide interesting insights into the challenges of governments and organisations making macro-level decisions on energy provision daily.
For those people dealing with their own businesses and domestic requirements, renewable energy finance offers a route to providing self-sufficiency against the threats of fluctuating fossil-fuel prices and external shock factors. For many, this will provide peace of mind in a time of economic turbulence and a positive step towards improving the environment.
An Interesting Option for Farmers: Box Schemes
The popularity of box schemes is growing at a pace, as consumers seek out ways to buy high-quality and fairly priced fruits and vegetables that are locally produced and organically grown. The recent food scandals, including GMO crop fears and the horse-meat incidents of recent months, are slowly increasing public interest in the provenance and quality of food.
Changing Public Consciousness
These trends merge with other linked developments, including the Slow Foods movement, Paleo eating and other dietary regimes including vegetarianism and veganism, foraging and eating locally grown food to minimise food miles. Smart food producers and growers are seeking ways to capitalise on this by selling their produce directly to the customer. One only has to witness the rise of local farmers’ markets, which are now being hosted in most towns and cities across the UK on a regular basis and tempting consumers away from the supermarkets and towards to local producers once again.
National Box Schemes
A number of national box schemes already exist and are run commercially on a national scale, but alongside these big names such as Abel and Cole and Riverford Organics there is a network of local and smaller co-operatives that largely thrive on word of mouth and use local farmers’ markets and online marketing to build up their customer base. Such box schemes often begin with basic fruit and vegetables which are produced organically. However, they often diversify to include in-demand items such as locally produced honey, baked goods and even organic cleaning and beauty products.
Expanding Operations
Farm loans have helped various co-ops expand their organic-vegetable operations to meet the demand for local vegetable box schemes and some have opened up farm shops to cater to their local communities. The future is looking positive, with the prices of fruit and vegetable organic boxes often comparable to the mass-produced supermarket varieties. And customers are commenting favourably on the taste and nutritional benefits of the organic and locally produced food that they are enjoying.
These trends also offer options for farmers and producers to diversify into specialist fields to meet niche customer demands. New products include essential oils for organic beauty treatments and alternative health remedies. There is also a demand for heritage fruits and artisan ciders. For those farmers with ambition and vision, a well-timed business plan and access to a farm loan could really open up a fresh route to a profitable new business.
Renewable energy funding
With fuel prices in the UK at an all-time high and still climbing, it’s becoming more important than ever to encourage any and all sources of renewable, green energy. Therefore we are pleased to be offering currently some of the best renewable energy financing available.
As the most brilliant minds in the world continue to come up with more sources of renewable energy, and increasing the efficiency of the ones which are currently available, we are striving to remain flexible in our provision and doing all we can to encourage people to take up the mantle of eco-friendliness.
We are proud that we can provide funding ANY source of renewable energy, including biomass systems, anaerobic digestion, hydroelectricity and wind turbines. The key features of our financing arrangements include:
- We can fund 100% of the purchase – no deposit necessary
- If required, we can fund in staged instalments
- We offer fixed monthly payment terms with rates from 3%
- All renewable energy payments are 100% tax deductible
- We will provide you with a decision in as little as three hours.
With reports from all the leading centres for energy research suggesting that it won’t be much longer (in the grand scheme of things) before fossils fuels become unviable as a source of energy, more and more businesses are turning to renewable, eco-friendly energy solutions. This is especially true in the agricultural industry, where biomass systems are becoming an effective way to reduce farm waste and cut energy costs by using naturally produced biomass to supply the farm’s power.
Wind energy is currently in-vogue in the UK too, with the world’s largest active wind farm recently being completed off the British coast. Wind turbines are dotting the landscape in many of the country’s windiest areas, but there are still numerous opportunities to increase this number.
At Nationwide Corporate Finance, we are one of the few sources of lending available for businesses who want to capitalise on eco-fuel opportunities, as many banks have stopped financing businesses at all for anything in the current economy.
We are a top-rated supplier of finance to the renewable industry, with over 40 years of experience in providing finance to businesses. We know that the work never stops on your business, and when something is needed immediately, that usually means yesterday. With a 98% acceptance rate, 3 hour decisions, and cash in the bank within 24 hours, you won’t have to slow down to deal with your finances – we’ll make sure they keep up with you.
Machinery Finance
Having efficient and reliable machinery is fundamental to ensuring the profitability and overall success of any business.
Effective machinery can allow processes to be done more quickly and efficiently, reducing overheads whilst producing the same (or better) quality end results.
The sheer cost of machinery can however make acquisition difficult without proper financing.
Finance should be a fundamental component of any capital equipment purchase as it allows acquisitions to be made without impacting on any cash reserves whilst allowing you to better manage and improve your cash flow.
There are also a range of tax benefits associated with some forms of equipment financing which; combined with the previously mentioned cash flow benefits; could allow you to establish greater financial security: an especially important factor given the current economic climate.
No matter what your industry, we can help you obtain the machinery you need to help improve productivity and efficiency.
Examples of the industries machinery finance is available to include:
Machinery finance from Nationwide is also incredibly flexible- allowing you to purchase single items of machinery (both new and used) right through to complete production and assembly lines.
If you’re looking for machinery finance, be sure to contact NCFPLC today. Our team of expert advisers have more than 40 years’ experience and offer highly competitive rates.
Call 01234 240155 and our machinery finance team will assess your requirements promptly and
professionally.