TAMS II Farm Investment Guide

Introduction to TAMS II

Targeted Agricultural Modernisation Schemes II (TAMS II) is a series of investment aid schemes for farmers, co-financed by the EU and Irish State (under Ireland's Rural Development Programme).

The schemes will provide €395m in investment aid to farmers by 2020 and help support the sustainable development of Irish agriculture.

This guide has been designed to assist farmers who are planning to undertake some element of farm investment, whilst availing of grant aid.

 

Guidelines for TAMS II Farm Investment

1. Ensure Proposed Investment is Aligned to the Long-term Goals of the Farm

Before undertaking any farm investment, it is important to invest adequate time and resources in the pre-planning phase. This is a key part of the process that often does not get the attention it deserves. Take the time to establish what you want to do with your farm in the immediate and longer term, and put a plan in place to help you achieve the desired results. Ensure that any investment fits in with the long-term goals of your business.

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Key Considerations:

  • Present and future stock numbers / scale
  • Labour efficiency
  • Compliance with EU regulations
  • Will proposed investment increase future farm profitability?

2. Ensure the Farm can Afford the Proposed Investment

Once you have considered the potential value of the farm investment, it is essential to fully cost the development to ensure the farm can afford the proposed investment. It is prudent also to include a contingency (of c.10%) for over-runs. Loans should be structured over the appropriate time period of the investment to ensure that they don’t place undue pressure on cashflow by trying to repay in an unrealistic timeframe. Consideration should be given to the current and future needs of the farm. It is advisable to maintain some element of a safety valve for your business, in case it comes under cashflow pressure in the following years. 

Ensure the Farm can Afford the Proposed Investment

Key Considerations:

  • What is total cost of proposed investment, including contingency?
  • Has the farm the ability to meet new loan repayments?
  • Current and future living expenses
  • Useful life of the asset and proposed loan term (should be aligned)

3. Meet with Your Bank

Some farmers will have two loan requirements under TAMS II – “bridging finance” to bridge the receipt of grant aid (for up to 12 months) and “term finance” for the net cost of the investment. When approaching your bank for finance it is important to take the necessary time to prepare your application. Engage early and arrive prepared. Put your best foot forward and show your bank the strength of your business and your proposal. When meeting with the bank you must demonstrate that your business has the ability to repay capital and interest over the duration of the loan. To establish this, the bank will focus on the performance of the farm over the previous three-five years as demonstrated by the financial or trading accounts of your business.

Meet with Your Bank

Supporting Documentation:

  • 3 years of Financial accounts
  • 6 months of bank statements (if not currently an AIB customer)
  • Tax confirmation
  • Accurate costings
  • Letter of confirmation of farm partnership agreement (from Agricultural Consultant) if applicable

4. Confirm if Planning Permission is Required

Farmers who are undertaking TAMS II supported farm investment will require full planning permission or a letter of exemption for investment in buildings, structures and fixed equipment from their local authority. Full details of the investments that require planning permission or a letter of exemption are available on the Department of Agriculture’s website. Planning permission can take up to three months, and can sometimes be delayed with requests for further information. Give yourself plenty of time and apply early.

Confirm if Planning Permission is Required

Key Considerations:

  • Is planning permission / letter of exemption required?
  • Engage engineer to draft planning application or complete declaration of exemption if applicable
  • Allow sufficient time for planning to be processed (typically up to three months)

5. Make Your Grant Application

All TAMS II grant aid applications must be submitted online through the Department of Agriculture’s website. When submitting an application, the paperwork to accompany the application can be attached to the application or posted (to the Department of Agriculture, Johnstown Castle Estate, Co. Wexford) within 10 working days of the date of submission of the application. If the required documentation is not submitted within the 10 working days, the application will be rejected.

Make Your Grant Application

Key Steps:

  • Submit online application via www.agfood.ie (individuals must be registered for online services)
  • Submit required paperwork by post or as an attachment to your application in PDF format:         

            - Detailed drawings of proposed new build

            - Educational certificates (for YFCI Scheme)

            - Copy of Birth Certificate

            - Farm Plan layout (Scale 1:500)

            - Company – Certificate of Memorandum

6. Complete the Investment

You cannot commence your investment works until approval has been received from the Department of Agriculture. Once you have received loan approval, you can commence work on your proposed investment. 

Complete the Investment

Key Considerations:

  • Work cannot commence until approval received from Department of Agriculture
  • Three years to complete works and submit claim for payment
  • No part payment (except in case of additional payment under Young Farmers’ Capital Investment Scheme where applicant has completed training and made initial 40% payment)

7. Draw-down Your Loan

Draw-down of funds typically takes place in arrears against invoices. Prior to loan draw-down, most financial institutions will request a copy of the letter of grant approval from the Department of Agriculture and a copy of planning permission (if applicable).  

Draw-down Your Loan

Key Considerations:

  • Is term finance and bridging finance required?
  • Draw-down against invoices relating to current project

Supporting Documentation:

  • Letter of grant approval
  • Letter of confirmation for Planning Permission

8. Make an Application for Grant Payment

Once you have completed all investment works, you must then make a claim for payment to the Department of Agriculture. Grant aid will only be paid in respect of new equipment or investments when full ownership has been transferred to the applicant. Full ownership is defined as when the applicant has fully paid for the investment. All works must be completed and a valid claim for payment received by the Department within three years. Supporting documents such as receipts and a tax clearance certificate will be required. Payments will be made by electronic fund transfer.

Complete the Investment

Key Information:

  • Full ownership before making a claim
  • Payment claim to Department of Agriculture
  • Supporting documentation such as receipts and tax clearance certificate required
  • Payment by electronic transfer