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Two Lincolnshire farmers are preparing to launch their new straw pellet manufacturing facility after securing a Rural Development Programme for England (RDPE) grant of more than £200,000.

Simon Stubbs and Simon Wells will use part of the investment to modify a redundant building at Rookery Farm in Louth.

The funding, which is administered on behalf of the East Midlands Development Agency (Emda), was also awarded for the purchase of plant and machinery.

Simon Stubbs, director of Straw Pellets, explained: “Since we were awarded the grant in March, it’s been all systems go to renovate the building and order the kit. We were keen to move quickly so that production could coincide with the start of this year’s harvest. Our aim is to produce around 5,000 tonnes of pellets per year when we’re operating at full capacity.”

The pellets are made from natural ingredients, such as wheat and oil seed rape straw, which is being sourced from local farmers and producers.

Stubbs said: “We have plans to move into the commercial energy market and have secured a contract to supply the DRAX power station in North Yorkshire. Other potential opportunities we are exploring include using straw pellets to generate power for the drying of cereals and other food crops.”

Andrew Morgan, Emda’s skills and communities director, said: “The time is right for rural businesses to be branching out into emerging sectors like low carbon technologies, as this is where they will secure their competitiveness. Straw Pellets is a great example of a project which will improve the sustainability of the agricultural sector in the future.”