What is it?
The Small Producers Pilot Fund provides capital funding to support the small producer food and drink sector in the Highlands and Islands.
Funding will be targeted towards organisations that provide services or benefits to a group of individual small producers - such as food hubs, producer groups, communal infrastructure, abattoirs etc.
We are looking for projects that achieve one or more of the following outcomes:
- Increased levels of innovation and productivity
- Sustainable local food and drink production
- Improved collaboration
- Increased energy efficiencies
- Strengthened and/or shortened supply chains
- Sustained jobs in rural communities
- Strengthened local economy
About the fund
The total budget available is £175k to support a maximum of 17 projects. The funding is offered as a non-repayable capital grant between £10,000 and £50,000, which could cover up to 100% of the total cost of the project.
Please note, all projects must be completed and funding fully claimed by 10 March 2026. If the full grant awarded to you has not been claimed by this date, the balance will be withdrawn. If planning permission is required to implement the works detailed in your application, this must be in place prior to submission of your Expression of Interest (EOI) in order to fully claim the project by 10 March 2026. Evidence will be required along with planning permissions and any other building consent as part of your application, if relevant.
Our grant contribution to projects will be based on financial need. Applicants will be required to provide financial information on request to evidence need and enable assessment. The final grant will be subject to specific terms and conditions set out in an individual grant award letter.
What can the fund be used for?
The funding can be used towards capital investment, including but not limited to:
- New capital equipment (i.e. vending machines)
- Shared services/facilities (i.e. refrigeration, butchery, waste management)
- Fixtures and fittings
- Installation costs and related small building works
- Expansion or upgrading business premises
- The purchase of vehicles e.g. delivery vans may be considered at HIE’s discretion
Where retail of small producer food and drink products forms the core of the organisation, applicants must demonstrate how their project will achieve at least one of the following:
- Deliver significant impact within a remote or rural area
- Offer a distinctive proposition that benefits small food and drink producers
What can the funding NOT be used for?
Funding cannot be used for the following:
- Projects that have already started at the time of submitting an expression of interest. Any costs that have been invoiced to the applicant or paid by the applicant prior to submitting an expression of interest will not be eligible for funding. Any expenditure incurred before an approval is entirely at the applicant’s own risk
- Revenue costs e.g. wages, training, marketing, consultancy, feasibility studies etc.
- Capital items eligible for support from the Crofting Agricultural Grant Scheme (CAGS) will not be covered by this fund. More information on CAGS can be found here.
- The purchase of heavy vehicles e.g. tractors
Who's eligible?
- Organisations or individual SMEs that provide services or benefits to a group of small producers. This includes but is not limited to:
- Food hubs – entities that aggregate, distribute, or market products from multiple small producers.
- Routes to market - organisations that create or facilitate routes to market for individual small producers.
- Representative bodies – organisations that promote/showcase small producers such as Regional food groups or Farmers Markets.
- Shared services and facilities providers – enterprises offering collective resources such as processing, storage, or distribution facilities.
- Abattoirs (please note we will discuss applications from abattoirs with the Scottish Government to ensure alignment with alternative public sector support).
- Applicants must evidence that they provide a benefit to a number of individual small producers or the local supply chain (e.g. partnership agreement, letters of support, supplier/customer base).
- If relevant to the project, applicants must own premises in the Highlands and Islands or have a lease in place with at least five years remaining. They sholuld also have written permission from the landlord to make changes to the premises.
Who is not eligible?
- Businesses and organisations that are not based in the Highlands and Islands.
- Large enterprises (exceeding the SME definition*) including individual businesses, social enterprises or where a group of related businesses together is part of a large enterprise.
- Organisations that are primarily core funded by the public sector (core funding does not include project funding and service level agreements with the public sector).
- Religious and political organisations
Application process
Applications will follow a two-stage process. The first stage is to complete the online Expression of Interest Form (EOI) available on this page.
The deadline for submitting an EOI is 12 noon 9 January 2026.
We will communicate the outcome of EOIs within four weeks of submission. Successful EOIs will be progressed to the second stage of application. Unsuccessful EOIs will be acompanied by detail of why they have not progressed and will signpost to other forms of support where possible.
How to apply
- Complete and submit the Expression of Interest (EOI) form.
- On the EOI form, its important to provide enough information to enable us to assess your applications efficiently.
- Please note the EOI forms can't be saved. We recommend information is saved in a separate document.
- Second stage application will require additional documentation. This includes copies of historic accounts and evidence of two quotes for goods and services.
The small print - This is important
- All HIE grant assistance is discretionary. Grant awards are subject to due diligence and budget availability. Due diligence includes making an assessment on the need for public funding; the viability of the business going forward; the ability of the applicant to deliver the project; the impact of the development on the economy, subsidy control considerations and the strength of the business case presented to HIE.
- Making an application to the fund does not guarantee that your application will be successful. If you are not successful in your application or are only partially successful e.g. you receive funding of a lesser amount than you applied for, we will contact you to let you know why you have been unsuccessful and point you in the direction of other possible sources of funding.
- There is NO appeals process. We are unable to consider a complaint purely relating to dissatisfaction as to the outcome of a funding decision. However, if you have identified a specific process failure relating to your application then you may wish to make a formal complaint. See our formal complaints process for more information.
- HIE funding will be released upon receipt of claims and proof of payment. In exceptional cases, grant funds may be released against unpaid invoices if a cash flow need is demonstrated and approved on a case-by-case basis.
Definitions
*SME - The main factors determining whether an enterprise is an SME are that in your last published annual accounts you had:
- Fewer than 250 employees (full time equivalents)
- Either a turnover of no more than €50m (£44m) or balance sheet total no more than €43m (£38m)
If you are part of a group, please see the user guide to the SME definition for further information.
Small producer - the definition of a small producer is:
- Have a holding no larger than 30 hectares (excluding common grazing), no minimum size.
- Are active/operating with an annual turnover of less than £2 million.
- Have a Business Reference Number (BRN).
- Operating in the local and domestic food and drink market (the export market is outwith scope).
- Have 10 or fewer Full Time Employees (FTEs), including seasonal and self-employed workers but excluding apprentices and volunteers.
Need to speak to us?
If you would like to talk to someone about your application, please email enquiries@hient.co.uk and we will get back to you.
