Warning over snow damage repair work

Published on Monday 22 February 2010 18:08

A NUMBER of the farmers who saw their buildings collapse under the snow last month are considering linking in the restoration work of these properties with other developments.

But this has its problems according to one financial adviser who has warned that farmers need to be aware what can and cannot be done in linking insurance repair work with other developments that may be grant aided.

Dugald Hamilton, regional manager for the Agricultural Mortgage Corporation, said: "We've been working with farmers looking to structure finance for rebuild projects and in the process have discovered that insurance monies cannot be used for repair or re-building works if used in conjunction with any existing SRDP (Scotland rural development programme] grants."

He added that after seeking clarification from the government department (SEERAD) he understood that where SRDP funded projects have been started or funds awarded, insurance payouts can only be used for separate works associated with repair or replacement of snow-damaged buildings.

Hamilton said the best advice for farmers was to keep in close contact with the SRDP case worker. However, he saw why farmers who have builders on site could make substantial savings if they could tie in additional insured works by negotiating with their builders.

The situation has arisen because many farmers have decided to take advantage of the situation and redevelop buildings to make them more suitable for the long term.

Malcolm Taylor, of Bell Ingram, one of AMC's agents in Scotland, said: "Farmers are looking at damaged sheds in one of two ways. Some of the people we've been speaking to are taking the view that it's an opportunity to bring forward a planned redevelopment or to clear out badly laid out old steadings.

"Others have a much less philosophical mindset and are desperate to repair and rebuild much needed winter housing and storage."

Although most of the damage was limited to the North-east and Borders regions, it is estimated that more than 3,000 farm buildings throughout Scotland have been affected by snow damage and repair and re-build costs are estimated to exceed 25 million.

Last week, Cabinet secretary Richard Lochhead announced a fund of up to 3m to help deal with the uninsured aspects of the damage, such as finding alternative accommodation for livestock.

Eligible farmers could get up to 6,000 from this fund, which was suggested by a short-term working group set up by the Scottish Government.