State Aid Notification Under Article 88(3) of the EC Treaty
(Aid Schemes and Ad Hoc Cases)
1. Member State
2. Level at which scheme is administered
Cumbria Rural Enterprise Agency
3. Administrative Bodies with Responsibility for the Scheme
a. Agency Officer: Pauline Herbert
Rural Enterprise Centre
PENRITH CA11 0DT
Tel: +44 768 891555
Fax: +44 768 892666
b. UK Contact: Stephen AndersonJacinta Vaz
EU Agriculture & Co-ordination
DivisionFisheries Structures Division
8th Floor, 9 MillbankRoom 328, 10
c/o Nobel House
17 Smith Square
LONDON SW1P 3JRA 2HH
Tel: +44 207 238 3054270 8042
Fax: +44 207 238 3059270 8019
4. Title of Aid Scheme
Distinctly Cumbrian (the county of Cumbria)The Distinctly Cumbrian
(Fisheries and Aquaculture) Scheme
5. Legal Basis
Regional Development Agencies Act 1998, Section 5
6. Is it a New Scheme?
7. Annual Expenditure
The scheme has a maximum budget of £2.9m. This includes
administrative and employment costs for officers employed by the
scheme to undertake its activities. The expected annual spend profile
Period to 30.06.05 0.800
Year to 30.06.06 1.200
Year to 30.06.07 0.900
8. Aid Intensity Formatted: Font: Bold, Italic
Aid is paid by way of cash grants and is paid against receipted
invoice. No other form of aid is payable.
The maximum aid intensity will be 40% on any single approved project
(and 40% on any single eligible item within that project) to a financial
maximum of approximately £67,000 in total (€100,000, calculated at
the date of the letter of offer).
9. Date of Implementation
The scheme will be available from 25th May 2005 Formatted: Superscript
10. Duration of Scheme
The scheme will be available until 31st December 2006 (closing date Formatted: Superscript
for applications will be 30th September 2006) Formatted: Superscript
Distinctly Cumbrian will wish to extend the scheme beyond 31 st Formatted: Font: Verdana, 12 pt, Not Bold
December 2006 to 30th June 2009 but application will be made under
the regulations pertaining at that time. Formatted: Font: Verdana
711. Aim of SchemeObjective of Aid
The Distinctly Cumbrian scheme will be available to both
producers and processors of agricultural produce such as ice
cream; meat products; honey etc.
The aim of the scheme is to regenerate and strengthen the rural
economy of Cumbria by supporting the production,processing
distribution and marketing of Cumbrian added value products.
Within that definition the scheme has 3 main objectives:
a.To create an internationally accessible virtual market place that is Formatted: Bullets and Numbering
backed up by Information & Communication Technology networks
within the supply chain in order to overcome remoteness and to
connect producers to the markets for their products;
b.To enhance the infrastructure for local production and distribution to
enable local producers to meet demand created through the activities
of Distinctly Cumbrian by working with existing wholesale distributors
to extend their capacities or by setting up additional means of
distribution; Can you explain additional means of distribution?
c.To develop the capacity of producers by encouraging collaboration
and cooperation and demonstrating new operating practices. Because your
scheme covers such a wide area of agricultural products and activities it is essential you explain operating
practices and which activity it pertains to?
Formatted: Indent: Left: 0"
The scheme is available to small and medium sized enterprises and
targets businesses that have the potential to expand and generate
new employment. These are “producers of local products” where
association with Cumbria as a distinctive brand could facilitate growth.
The project aims to remove some of the main barriers to growth
experienced by these producers.
12. Eligible Costs
Aid will be made available under Articles 8 and 11 of Regulation EC
Items Eligible for Grant Aid Formatted: Font: Verdana, 12 pt, Not Bold
Formatted: Font: Verdana, 12 pt
Eligible expenditure under the scheme is:
a. The construction, acquisition or improvement of immovable Formatted: Bullets and Numbering
b. The purchase or lease purchase of new machinery and
equipment, including computer software up to the market value
of the asset. Other costs connected with a leasing contract (tax,
lessor’s margin, interest refinancing costs, overheads, insurance
charges etc) are not eligible expenditure;
c. General costs, such as architects, engineers and consultation
fees, feasibility studies, the acquisition of patents and licences,
up to 12% of the expenditure referred to in points a. and b.
Examples of where aid might be granted would be:
o the purchase of weighing, labelling or packaging equipment to Formatted: Bullets and Numbering
enable the sale of products by mail order;
o any equipment which involves the processing of fish after landing
and which adds value, for example, smoking equipment.
This, however, is not an exhaustive list.
Formatted: Font: Verdana, 12 pt
Second Hand Equipment – If the project involves the acquisition of Formatted: Font: Verdana, 12 pt
second hand equipment applicants will need to: Formatted: Font: Verdana, 12 pt
o obtain a declaration from the seller of the equipment Formatted: Bulleted + Level: 1 + Aligned at:
0.75" + Tab after: 1" + Indent at: 1"
confirming its exact origin and that the equipment has not
Formatted: Bullets and Numbering
already been the subject of national or Community
o show that the purchase of the equipment represents a
particular advantage for the project, or is made necessary
by exceptional circumstances (e.g. no new equipment
available on time, thus threatening the success of the
o show a reduction of the costs involved as compared with
the same cost new, while maintaining a good cost/benefit
o demonstrate that the second hand equipment has the
technical and/or technological characteristics necessary for
the requirements of the project.
Specific Restrictions Formatted: Font: Verdana, 12 pt, Not Bold
Formatted: Font: Verdana, 12 pt
As a general rule the following items will not be considered for grant
o Vehicles – where they are not for the specific and sole use of the Formatted: Bullets and Numbering
project. Applicants would need to demonstrate that a vehicle was Formatted: Font: Verdana, 12 pt
an essential part of the project i.e. the project could not go ahead
o Computers – as with vehicles, you would need to demonstrate that
it was an essential part of the project;
o Property –leasehold land and buildings with a term of less than 5 Formatted: Font: Verdana, 12 pt
Formatted: Indent: Left: 0"
The scheme will only be available to those enterprises involved in the
processing and marketing of fisheries and aquaculture products.
14. Web Address
www.crea.co.uk Formatted: Font color: Auto
8. Other Aid Limitations or Criteria
Aid will be limited to those small and medium sized enterprises operating within the
county of Cumbria. Formatted: Font color: Auto
The aid will be given for eligible costs with one or more of the following specific Formatted: Font color: Auto
outcomes within the overall objectives of the project specified in para7 above: It is not very
clear where or what these are?
reduction of production costs Formatted: No bullets or numbering
improvement and redeployment of production
improvement in quality
preservation and improvement of the natural environment, hygiene conditions and
1. promotion of the diversification of farm activities
Aid will not be available for producer groups as defined in para 12 Article 2 Regulation
Projects for which aid is requested will be required to fit the definitions/aims referred to
in 7. above and will be subject to approval by an appraisal panel who will consider the
viability of both the project and the applicant enterprise. The panel will also consider how
closely the project meets the targets of the scheme in relation to the level of aid
requested. Who are the appraisal panel; how were they chosen what is the approval criteria process and Formatted: Font color: Auto
how will they decide how the project meets the target of the scheme in relation to the level of aid
Thereafter, the scheme will operate on a “first come, first served basis” subject, firstly, to
annual cash limits agreed with the schemes funder (North West Development Agency)
and then until the scheme budget is spent. How is the first come first served basis going to work Formatted: Font color: Auto
after the panel have chosen who is eligible to receive aid?
Aid will only be provided in accordance with Articles 5 and 26(1) of Regulation Formatted: Font color: Auto
1257/1999 as verified by DEFRA or their nominated agents.
Aid will not be granted either directly or indirectly:
to facilitate or assist in exports; or Formatted: No bullets or numbering
the manufacture or marketing of milk substitutes
processing and marketing of sugar
And at no stage shall the aid be contingent on the use of domestic over imported
Aid will be provided to a maximum ceiling and intensity limit as specified in para 9
belowof 40% but the actual amounts of aid below these limits and ceilings which may
vary depending upon whether other public funding is available; how closely the project’s
outputs match the scheme targets; and the financial need of the individual applicant. Formatted: Font color: Auto
9. Forms of Aid
Aid is paid by way of cash grants (is this cash?) and is paid against receipted invoice. No Formatted: Font color: Auto
other form of aid is payable (How will you ensure this?) and monitoring records will be Formatted: Font color: Auto
kept by CREA to ensure that this is so. The scheme has 3 levels of grant assistance: Formatted: Font: Times New Roman, Font
Small Capital Grants – for projects up to a total cost of £20,000 (max aid £5,000 or 40% Formatted: Font: 12 pt, Font color: Auto
of eligible costs which is the lower); Formatted: Font color: Auto
Formatted: Indent: First line: 0"
Large Grants – for projects above £20,000 up to a maximum aid limit of £70,000 Formatted: Font color: Auto
(100,000 euros) or 40% of the eligible costs which ever is the lower;
Bursaries – for assistance in new website design up to £1000 (or 50% of cost
whichever is the lower). Formatted: Font color: Auto
10. Eligible Costs for which Aid is Paid
The scheme will have both capital and revenue funds.
The scheme will not fund direct farming activity (the raising of livestock, for example)
but will help with the eventual product of that activity e.g. milk; meat; honey.
Capital aid will be given for the purchase or lease purchase of new machinery and
ointroduction of equipment including computer software up to their market value which Formatted: Font: Times New Roman, Font
allows the beneficiary to introduce a new process or to improve a process or to expand a
range. It will not be given for the straightforward replacement of existing equipment
undertaking a similar function.
Aid may be given, for example, to the acquisition of machinery for the
production of ice cream; for sausages; for ensuring traceability of meat products; for
equipping a farm shop; or for the production of honey but is nevertheless not restricted to
specific agricultural products.
Improvements to property; the construction of new buildings; and acquisition of land may
be considered where there is direct benefit to the production and processing of Cumbrian
The scheme will consider the acquisition of both new or second hand equipment. In the
case of second hand equipment, the following conditions will need to be met.
Seller will provide the exact origin of the equipment and declare that it has not Formatted: No bullets or numbering
previously been the subject of assistance
the purchase has a particular advantage or is necessitated by exceptional
the purchase is cost effective in comparison with a new item and thereby results in
less aid being granted
1. the equipment is technically suited for the project
In general terms eligible capital expenses will be those referred to in Commission
Regulation (EC) 1/2004 (23rd December 2003), Chapter 2; Article 4; Paragraphs 4 a. and
4 b. and the derogations from 4 b. listed as (a) to (d).
Marketing – in some instances aid may be provided for purchase or lease purchase of
machinery and equipment, including computer software up to the market value of the
asset for the purposes of marketing Annex 1 products.
This fund may be used in support of the capital fund where, for example, the beneficiary
requires one off consultancy in support of capital equipment acquired or education and
training in respect of the same.
Formatted: Adjust space between Latin and
Asian text, Adjust space between Asian text
Other uses may include set up costs for marketing/printing projects (although it will not and numbers
fund ongoing printing costs).
11. Penalties and Repayments
All aid is subject to a letter of offer, which forms a contract. Applicants who have Formatted: Font color: Auto
not commenced their project within 6 months of the intended start date (as notified to
Distinctly Cumbrian during the application process) will be contacted and will be
required to reapply if reasonable explanation is not provided Formatted: Font color: Auto
If a recipient is in default of the conditions of aid or disposes of the equipment, they are
required to repay the aid on the following basis: How will you keep track of this once aid has Formatted: Font color: Auto
been paid? Give details. (monitoring and compliance records will be kept by CREA who will Formatted: Font: 12 pt, Font color: Auto
also maintain constant contact with the grantee to ensure that any default is identified. Formatted: Font color: Auto
Default or disposal within 12 months of assistance – 100%
“ “ 13-24 “ - 80%
reducing by 20% (of total aid) per 12 month period thereafter.
In the event of a default interest shall be chargeable at the appropriate rates from the date
of the default to the date of the repayment in full on a compound basis at 4 basis points
above the EC reference and discount rate published in the Official Journal from time to
time You need to give the rate at which the interest will be incurred? (currently 5.68%). Formatted: Font color: Auto
Formatted: Font: 12 pt, Font color: Auto
Jay – this formula may change slightly before submission but the principle will remain. Formatted: Font color: Auto
12. Accumulation of Aid
The scheme does not allow for double funding with any organisation funded by the North
West Development Agency.
A project will be allowed match funding from the Cumbria Fells and Dales LEADER+
programme; the North Pennines LEADER+ programme; Objectives 2 and 3 Structural
Funds; and Local Authority funds provided, in all cases, the recipient operates within the Formatted: Font color: Auto
county of Cumbria and the overall level of cumulated aid from all these sources does not
exceed the intensity limit as specified in para 9 above. Monitoring records will be
maintained by CREA to ensure this is so How will you ensure this?. Formatted: Font color: Auto
Formatted: Font color: Auto
Applicants are required to declare in their application what funding they have been
granted/ have applied for in the previous 3 years. Formatted: Font color: Auto
13. Duration of Scheme
The scheme will start in Summer 2004 and extend until 1st July 2007
The scheme has a total budget of £4,778,500 not all of which is available for disposal as
aid. The budget includes administrative and employment costs for officers employed by
the scheme to undertake its activities.
Appendix 1 gives details of the spend profile over the life of the project. It should be
a. Should tThe project life extends beyond 1st July 2007 so thatthen any Formatted: Font: Times New Roman
exemptions required beyond that date will be applied for at the appropriate time and
within the terms of the regime then applicable;
b. The project funding is to cover both Annexe 1 and non-Annexe 1 products and Formatted: Font: Times New Roman, Font
this notification extends to funding provided for the manufacture processing and
marketing of Annex 1 products only; Formatted: Font: Times New Roman
c. The periods referred to are 12 monthly from 1st April to 31st March. Formatted: Font: Times New Roman, Font
Formatted: Font: Times New Roman
15. Specific Regional Objectives Formatted: Font color: Auto
The scheme is aimed at enterprises within the county of Cumbria. The scheme was set up
in response to the devastating effects of Foot and Mouth Disease in 2001 which severely
affected the county’s economy.
16. Estimated Number of Recipients
See covering E-mail Formatted: Font: Times New Roman, Font
17. Information and Control Formatted: Font color: Auto
Formatted: Font color: Auto
Publicity and information about the scheme is achieved through a number of avenues:
a.the employment of Development Officers whose role is to promote the scheme through Formatted: No bullets or numbering
attendance at appropriate events where potential applicants are likely to be e.g. Formatted: Bullets and Numbering
agricultural and county shows; food fairs and through networking with other business
advice agencies e.g. Business Link;
b. the production of printed brochures made freely available;
c.the use of success ‘stories’ in local newspapers; on local radio and television How will Formatted: Font color: Auto
this be financed?
d.development of a Distinctly Cumbrian web site the address of which shall be
communicated to EC as soon as it is set up.;
e.connection with our accountable body, Cumbria Rural Enterprise Agency.
The process for applying for funding to Distinctly Cumbrian is:-
The scheme will be set up and published in accordance with regulation 1/2004 Formatted: No bullets or numbering
and no aid shall be granted to applicants until this has occurred.
The aid scheme does not create an automatic right to receive the aid. Further
action at administrative level is required. This is described below.
Aid provided under Article 14 (Consultancy) shall be notified to the recipient as
such and full information about other similar aid received by the recipient during the
previous 3 years shall be obtained by the grantor
An Expression of Interest is received by the support unit. If it is eligible and fits within Formatted: Bullets and Numbering
the aims and objectives of Distinctly Cumbrian You need to include these in the pro-forma the Formatted: Font color: Auto
client is allocated to the most appropriate Development Officer, which depends on their
individual expertise or the geographical location of the enterprise. The Development
Officer acts as ‘champion’ to the project and takes no part in the appraisal process;
The project’s Development Officer is available to support the applicants by way of:-
oOne –to-one on site visits
oAssistance with completion of the grant application
oAssistance with other sources of funding
oReferral to other agencies
Once supported, the applicant submits either the Small Grant Programme application or
the Large Grant application whichever is appropriate. These application forms have been
adapted from North West Development Agency forms and those of other similar
Large Grants – the application is then appraised by the Distinctly Cumbrian coordinator
who is this person a name and contact number would be useful if possibly needed. Thereafter, a Formatted: Font color: Auto
minimum of 2 partners Who are these partners and what are they partners of? meet and undertake Formatted: Font color: Auto
an independent appraisal of the project, make recommendations and conditions. The
Board of Distinctly Cumbrian then considers the project appraisal and approves, defers or
declines the application;
Small Grants – The application is then appraised by the Distinctly Cumbrian
coordinator. A recommendation is made to the Small Grants panel whose panel members
are a mix from both public and private sectors You should give names of the private and public Formatted: Font color: Auto
sectors. The panel has delegated project approval authority from the Board to a maximum
Once approved, an offer letter (contract) is issued;
Enterprises may claim against defrayed expenditure upon evidence of that expenditure
and achievement of outputs as specified within the letter of offer.
Compliance with state aid regulations (and guidelines where applicable) will be
monitored by DEFRA or their authorised agents and the state aid coordinator at the
Formatted: Indent: Left: 0"
18. Compatibility with the Treaty
The scheme is compatible with article 87(3)(c) of the treaty which provides that aid to
facilitate the development of certain economic activities may be considered compatible
with the common market. In particular, the aid will pursue objectives as set out in Section
??? of the treaty namely, the reduction of production costs; the improvement of Formatted: Font color: Auto
production; the improvement of quality; the preservation and improvement of the natural
environment; and the promotion of farm diversification activities.
Aid will be used to encourage the production and marketing of quality agricultural
Aid will be used to encourage the creation of producer groups and producer associations.
We need to insert more references to the Sections of the treaty here –Jay can you help on Formatted: Font color: Auto
The scheme is compatible with Article 87 of the treaty as it satisfies the requirements of Formatted: Font: Times New Roman, Font
EC Regulation 1/2004 “State Aid to small and medium sized enterprises active in the
production, processing and marketing of agricultural products.
Other Relevant Information
Appendix 1 – Distinctly Cumbrian Spend Profile
DISTINCTLY CUMBRIAN Formatted: Left: 1.25", Right: 1.25", Top:
1", Bottom: 1", Width: 8.5", Height: 11",
Lifetime Spend Profile with Other Sources of Income by Strategic Objective Header distance from edge: 0.49", Footer
distance from edge: 0.49"
Total Formatted: Left
2002 - 2003 2003 - 2004 2004 - 2005 2005 - 2006 2006 - 2007 2007 - 20
Revenue Capital Revenue Capital Revenue Capital Revenue Capital Revenue Capital Revenue
SO1 1229835 20000 67660 100000 100000 255259 100000
Formatted: Left 225141 70000
SO2 2590941 24413 100000 57604 301318 50000 350000 206500 527111 126500
Formatted: Left 284803 116500
SO3 718799 34948 74100 40000 60000 50000 127630 40000
Formatted: Left 90056 30000
Adminstration 238925 34769 37798 32340 33500 33500 33500
TOTAL 4778500 59182 134948 95402 395418 190000 510000 390000 910000 300000
Formatted: Left 600000 250000
Annual Totals 194130 490820 700000 900000
1300000 Formatted: Left 700000
SO1 - Create an internationally accessible virtual marketplace that is backed up by ICT Networks within the supply chain, in
order to overcome remoteness and connect producers to the markets for their products
SO2 - Enhance the infrastructure for local production and distribution to enable local producers Formatted: Left created
to meet demand
through "Distinctly Cumbrian" Formatted: Left
SO3 - Formatted: new
Develop the capacity of producers by encouraging collaboration and cooperation and demonstratingLeft operating