Defra Farming Innovation Investor Partnership

Key Features

UK registered SMEs can apply for a share of up to £5 million to develop innovative farming solutions. This must align with private investment from selected investor partners.

Programme:     Innovate UK

Award:     Share of up to £5 million

Opens: 24th Jul 2023

Closes: 30th Aug 2023

! This scheme is now closed

Overview

Innovate UK, part of UK Research and Innovation (UKRI), will work with The Department for Environment, Food and Rural Affairs (Defra) to invest up to £5 million in innovation projects.

This funding is linked to Defra’s Farming Innovation Programme which is a partnership with UKRI’s Transforming Food Production Challenge and delivered by Innovate UK.

Scope

The aim of this competition is to:

  • develop ambitious late-stage innovative solutions, technologies, systems or approaches that will make significant steps towards improving productivity, increasing sustainability and resilience, and helping the agriculture sector move towards achieving net zero emissions by 2050
  • support late-stage experimental development projects being close to market and ultimately adoption by farmers

Your proposal must:

  • demonstrate your ambition to finalise a late-stage innovation
  • show your potential to grow and scale your business through successful negotiation of investment from a lead investor associated with the competition
  • provide a coherent project plan which integrates into your business strategy

Your solutions must significantly improve farm focused:

  • productivity
  • sustainability and the environmental impact
  • progression towards net zero emissions
  • resilience

Your project must be able to demonstrate how the project will benefit farmers, growers or foresters in England.

Specific Themes

Your project must address a significant industry challenge or opportunity in at least one of the industry subsectors below:

  • livestock
  • plants
  • novel food production systems
  • bioeconomy and agroforestry

Eligibility

If you are successful, any awards given to primary agricultural producers are subject to the green box exemption under the World Trade Organisation (WTO) Agreement on Agriculture.

Please see further guidance on green box subsidies here WTO guidance for support in agriculture. Applicants receiving this type of support must ensure that there is minimal to no distortion of trade and comply with the requirements of Annex 2 of the Agriculture Agreement.

Your project must:

  • have total costs between £750,000 and £3 million
  • start by 1 April 2024
  • last 18 months
  • carry out all of its project work in the UK
  • intend to exploit the results from or in the UK
  • be able to demonstrate how it will benefit farmers, growers or foresters in England

You must only include eligible project costs in your application.

Under current restrictions, this competition will not fund any procurement, commercial, business development or supply chain activity with any Russian and Belarusian entity as lead, partner or subcontractor. This includes any goods or services originating from a Russian and Belarusian source.

To lead a project your organisation must:

  • be a UK registered micro, small or medium-sized enterprise (SME)
  • be prepared to negotiate heads of terms for an aligned private investment

More information on the different types of organisation can be found in our Funding rules.

Subcontractors are allowed in this competition.

Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process.

You can use subcontractors from overseas but must make the case in your application as to why you could not use suppliers from the UK.

You must provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you. We will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.

All subcontractor costs must be justified and appropriate to the total project costs.

A business can only lead on one application in this competition.

Use of animals in research and innovation

Innovate UK expects and supports the provision and safeguarding of welfare standards for animals used in research and innovation, according to best practice and up to date guidance.

Applicants must ensure that all of the proposed work within projects, both in the UK and internationally, will comply with the UKRI guidance on the use of animals in research and innovation.

Any projects selected for funding which involve animals will be asked to provide additional information on welfare and ethical considerations and compliance with any relevant legislation as part of the project start-up process. This information will be reviewed before an award is made.

You can use a previously submitted application to apply for this competition.

Exclusions

Innovate UK are not funding projects that:

  • are not carried out by single SMEs
  • are collaborative research and development (R&D) projects
  • are not part of a company’s growth plan
  • are unable to prove there is potential for return on investment and growth
  • do not benefit farmers, growers or foresters in England
  • are equine specific
  • involve wild caught fisheries
  • involve aquaculture for fish production or human consumption
  • involve cellular or acellular production systems, fermentation systems for bacteria, yeast or fungi for human consumption
  • are for the production of crops or plants for medicinal or pharmaceutical use

Innovate UK cannot fund projects that are:

  • dependent on export performance, for example giving a subsidy to a baker on the condition that it exports a certain quantity of bread to another country
  • dependent on domestic inputs usage, for example giving a subsidy to a baker on the condition that it uses 50% UK flour in their product

Funding Costs

The Department for Environment, Food & Rural Affairs (Defra) has allocated up to £5 million, working in partnership with UK Research and Innovation (UKRI) Transforming Food Production Challenge, to fund innovation projects in this competition. This competition is delivered by Innovate UK and funding will be in the form of a grant.

If your organisation’s work on the project is commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically but for the purpose of this project will be undertaking commercial or economic activity.

For experimental development projects which are nearer to market, you could get funding for your eligible project costs of:

  • up to 45% if you are a micro or small organisation
  • up to 35% if you are a medium sized organisation

For more information on company sizes, please refer to the company accounts guidance.

If you are applying for an award funded under State aid Regulations, the definitions are set out in the European Commission Recommendation of 6 May 2003.

Aligned private investment

You must agree the private investment through a lead investor and reach heads of terms by 17 January 2024.

The aligned private investment:

  • must provide you with suitable capital at least twice the amount of the grant requested to complete your project and support company growth and scale ambitions
  • can be directed for use in your company, whereas the grant is to support the project only
  • can be used to fund additional costs typically ineligible for support by Innovate UK
  • must be provided under commercial terms negotiated with the lead investor and not Innovate UK

The investment can be in the form of either direct equity investment or a convertible loan. It must come from a lead investor, from the pool of investors associated with this programme. The lead investor may decide to syndicate with other investors from within or outside of the pool.

Interested in applying for this competition?

Book an appointment to speak to one of our advisors to discuss your eligibility to apply for this Grant Funding opportunity.