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Slurry storage and how to manage the cashflow gap
A slurry storage project with a reference cost of €75,000 with 60% grant aid sounds like a €30,000 investment - until you realise, you’re funding the full amount upfront and waiting six months or more for reimbursement.
For many Irish farmers facing extended closed periods, along with increasing the storage rate from 0.33m2 to 0.4m2 per the Nitrates Action Programme*, this cashflow gap represents one of the most significant financial challenges of compliance.
* An increase in the minimum required slurry storage capacity from 0.33 m./cow/week to 0.4 m./cow/week is mandated under Ireland’s Nitrates Action Programme and is set to take effect on October 1, 2028. Slurry costings as per Irish Farmer’s Journal Dairy Day 2025.
This article features in our Irish Farm Report 2026.
Discover more insights like this from Ifac's eighth annual survey capturing the experiences, concerns, and ambitions of farm families across Ireland – Download Now!
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The real cost of storage
Recent estimates put slurry storage costs at €600 to €900 ex. VAT per cow. For a typical 100-cow dairy herd requiring 20 weeks of storage (approximately 660 m.), total project costs often reach €70,000 to €80,000 ex. VAT. While TAMS 3 Nutrient Storage Investment offers up to 60% grant aid, the financial reality is more complex than the headline rate suggests.
The timing problem
• Month 0-3: Pay contractors full amount (€75,000)
• Month 4-5: Complete construction, arrange inspection
• Month 6-9: Receive grant payment (€45,000)
During this period, you’re carrying the full capital outlay while maintaining normal farm operations and cashflow commitments.
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VAT
Ifac advice would be to claim periodically as a minimum.
However, if the project is large scale claim more often. VAT can be claimed every month if cashflow is needed to be recycled into the business. Banks will bridge VAT if necessary, as a separate loan, usually 12 months.
Hidden costs beyond the tank
Grant-aided costs cover the storage structure itself, but several expenses fall outside the scheme:
• Site preparation and access improvements
• Concrete aprons and roadways
• Engineering and planning fees
• Connection to existing infrastructure
• Contingency for ground conditions
These can add 15-20% to your total outlay, further extending the cash requirement.
Financing options to consider
The right choice depends on your existing debt position, cash reserves, and upcoming capital commitments.
Most farmers use one of three approaches:
Working capital
Using existing cash reserves. Simple, but ties up funds that might be needed for feed, fertiliser, or other working capital through the spring.
Bridging finance
Short-term facility specifically for the VAT/grant gap. Banks are familiar with TAMS projects and typically offer 6-12 month bridging loans, though interest costs reduce your net grant benefit.
Term loan
Financing the net cost (post-grant) over 15 years of a maximum. Smooths the impact but adds interest expense.
• Based on reference costs not actual cost
• Up to 11 schemes, ensure you’re applying for right scheme for your investment
• Business structure matters, for example RFP qualifies for increased TAMS ceilings
You should always seek advice from your agri-advisor and accountant to ensure you’re claiming the right scheme in the right structure.
Tax relief: a partial offset
Capital allowances allow you to claim tax relief on the net cost over two years, typically worth 20-25% of your contribution in tax savings. For a €30,000 net investment, this could return €6,000 to €7,500 over two years - helpful but deferred.
Planning your investment
Slurry storage is unavoidable for most expanding or noncompliant farms, but the financial structure doesn’t have to strain your operation. Early planning around the cashflow gap – not just the technical requirements - makes the difference between a manageable investment and a liquidity crisis.
Before signing with a contractor:
Model the full cashflow timeline
from initial payment through grant receipt and tax relief
Stress-test your working capital
can you manage six months without that cash?
Compare financing costs
bridging versus term loans versus opportunity cost of using reserves
Factor in the non-grant elements
budget 120% of the tank cost for total project
Discuss with your accountant
structure the investment to optimise both compliance and cashflow
This article features in our Irish Farm Report 2026.
Discover more insights like this from Ifac's eighth annual survey capturing the experiences, concerns, and ambitions of farm families across Ireland – Download Now!
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