The scheme, part of the Northern Ireland Rural Development Programme, will assist only 1,200 farmers to carry out improvements to their businesses.
It opened for applications yesterday morning but it was on a first come, first served basis, which resulted in hundreds of farmers queuing overnight outside offices. Some had been there since Sunday.
The North’s Agriculture Minister Michelle Gildernew defended the “first-come, first-served” system as fair.
“We knew there was going to be no easy way. If we had done assessment panels it would have been a lot more bureaucratic and a lot more unwieldy,” she said.
The EU rural develop-ment programme grants are designed to help improve animal welfare and farm efficiency.
The farmers whose grant applications are successful will be able to buy from a government-approved list of items such as cow mattresses, creep feeders and computerised livestock identification systems.
If farmers get the maximum grant of £5,000 (e5,658), they must spend £7,000 (e7,921) of their own money on farm improvements.
Ms Gildernew said it was an “important boost to the economy“ because many of the items on the approved list had been made in Northern Ireland.
More than 1,000 Ulster Farmers Union members attended workshops in the past two weeks to help them accurately fill out the application forms.
The UFU is urging farmers to be patient and bear in mind that there is also a second tranche planned at a later date.
Graham Furey, presi-dent, said the concept of a farm modernisation scheme was proposed by UFU members. It represented more than £15 million (e16.9m) in funding for the farming sector and would boost the wider rural economy.
“We anticipate significant demand for scheme funding and we’ll continue lobbying to see in future if more funding can be released to future tranches of the scheme,” he said.