Examination of witnesses (Questions 1
- 19)
TUESDAY 1 FEBRUARY 2000
MR J LLOYD
JONES, MR
J BLACK, MR
R SAYER and MR
J TOMPKINS
Chairman
1. Welcome to this the first evidence session
of what is intended to be a very short inquiry into two specific
environmental issues confronting the farming industry at present:
the Integrated Pollution Prevention and Control (IPPC) Directive
and the climate change levy (CCL). We are not looking at the pesticides
tax, which at least is on the back burner at present though it
is something we may need to return to in the future. A particular
apology to you for dragging you away from the joys of your AGM
this morning and the joys of Herr Fischler and the Prime Minister.
We do aim to let you go about ten past ten so you can whistle
back to Park Lane as quickly as possible. Thank you for that.
We are very grateful to you for preferring us to them this morning.
May I also express my very real gratitude to you for a very comprehensive
and thorough memorandum of evidence from the NFU which we all
found very useful in preparing for this session? It made a lot
of points in it and we shall try to focus on some of those. I
suppose the thing which struck me was that you said "...
the Government has chosen a heavy regulatory route to achieve
its objectives". Do you think that "heavy regulatory
route" is perhaps the best way of securing the Government's
environmental objectives?
(Mr Lloyd Jones) No, we do not. We quite deliberately
said "heavy regulatory route" because one of the real
problems here is that the regulatory framework is actually designed
for an industrial process. What we have seen with ground water
regs, IPPC and with the climate change levy, both the nature of
the regulation, especially with climate change levy, and the means
of the rebates are actually applicable to an industrial type situation.
When you convert that into an agricultural situation with a myriad
of very small businesses then it does pose real problems. The
other thing we made very clear in our evidence is that there have
been significant reductions in energy within the intensive livestock
and especially the horticultural industry and those reductions
have come about because of market pressure.
2. There is a problem with climate change, there
is a problem with the kinds of issues the IPPC addresses. The
Environment Agency has given us a memorandum about pollution from
farming activities in the UK. They say, "Within the United
Kingdom, agricultural activities are estimated to emit about 225,000
tonnes of ammonia, representing more than 80 per cent of total
emissions of this pollutant". They talk about water pollution
incidents, they talk about poorly managed or excessive waste spreading
to land of pig and poultry wastes. The Environment Agency offers
us quite a catalogue of alleged abuses by the farming industry.
My question to you is this: how successful has farming been already
and how successful is it likely to be in the short term future
in reducing its pollution?
(Mr Lloyd Jones) May I ask my colleague Mr Tompkins
to address part of that and also Mr Black who is heavily involved
with the intensive livestock sector.
(Mr Tompkins) First of all we should like to say that
farming recognises these environmental issues and is acting to
address them. I should like to make the point quite clearly that
we are committed to reducing emissions in farming and we are very
concerned about climate change. It is the approach of the levy
with which we disagree, not the principles. If you look at an
industry such as horticulture, there have been dramatic cuts in
CO2 emissions within the horticulture industry with the utilisation
of CHP, thermal screens, new glasshouses. Mr Sayer can give specific
examples of these. You have also seen in the intensive livestock
sector a reduction in water pollution incidents; regrettably there
are still some but with the adoption of farm assurance schemes
and other such measures which have been taken on by farming you
have seen a reduction in that. We are still moving towards that
and we should also like to point out that in terms of emissions
farming is actually carbon neutral because the plants produced
by farmers actually take up carbon. That was a point made by DETR
themselves, that it is carbon neutral.
(Mr Black) I should certainly like to reiterate that
I think it is important to recognise that we are talking about
two separate bits of legislation here. The IPPC regulations really
actually set out to address the ammonia issue and the climate
change levy is set out to address the carbon dioxide emissions.
As far as carbon dioxide is concerned, agriculture is neutral.
If IPPC is really there just to address basically the ammonia
emissions aspects, then one questions why one needs to have quite
such wide ranging rules and regulations if we are looking at addressing
ammonia. As an industry we are quite happy to work with Government,
with other stakeholders in the environmental issues and try to
sort out a means whereby we can actually continue what I believe
is a very good track record of improving environmental control.
What we have a difficulty with is understanding why it is that
UK agriculture should be subjected to a higher regulatory burden
in relation to IPPC than our competitors.
3. We shall ask you questions on that later.
It is really the issue of how successful you have been in reducing
emissions.
(Mr Black) The evidence there would be there in terms
of reduced pollution incidents.
(Mr Sayer) In the glasshouse sector, we have been
extremely successful in reducing energy inputs and certainly in
the emission of carbon dioxide. The sorts of things we have done?
We have refurbished greenhouses, we have changed the ventilation
system on greenhouses, we have put in thermal screens in some
cases where it is appropriate. Those are all highly capital intensive
things. We have put in computer control; we now look at 24-hour
average temperature rather than just minimum temperatures which
actually allows us to run cooler night-time temperatures. Where
we cannot put in thermal screens then we put temporary polythene
screens in the roof. As regards CO2, we clean the flue gases from
the boilers, we inject the CO2 into the greenhouses to enrich
the CO2 levels in there so plants take that up. That actually
results in increased yield. I would estimate that over the last
ten years we have probably reduced our energy inputs by about
25 per cent but we have increased our yield per unit area by about
50 per cent. The actual energy which is being used to produce
a tonne of tomatoes or a tonne of cucumbers is way way less than
it was ten years ago.
4. Are you saying that is an industry-wide figure
and not just your organisation?
(Mr Sayer) Yes, in general those are developments
which the industry is taking up as a whole.
Mr Mitchell
5. This assertion in your evidence that some
farmers will close livestock units because of the scale of Environment
Agency charges is just scare stuff, is it not?
(Mr Lloyd Jones) We are very, very concerned because
obviously, as you are well aware, the actual profitability of
farming in the intensive livestock sector is very, very low. We
are obviously concerned for the livelihood of our members, but
we also have not lost sight of the fact that this has the potential
to have severe implications as far as rural employment is concerned
because of downstream activities like the processing. In fact
when farmers are encouraged to add value, that is especially what
the horticultural sector have done as growers and packers. When
you are talking about employment within packing plants and within
that downstream processing industry, it is not only the livelihoods
of the farmers concerned here but there are also significant potential
implications for rural employment.
6. That is a touching picture but what are you
saying? That they cannot afford these charges because they are
not currently profitable, or that the charges are too high in
any case?
(Mr Lloyd Jones) What we are saying is that there
are better ways of seeking the reductions. Of course, as Mr Sayer
has outlined, significant amounts of this work has actually been
done already by the horticultural sector. The great danger is
that the money which will go into climate change levy or IPPC
could actually be used far better and more efficiently by continuing
the work which is already going on on the greater efficiency.
7. Do you think the Environment Agency's charges
are too high?
(Mr Lloyd Jones) Yes.
8. Why? What level of charges would be appropriate
in this case or would you rather not pay any charges at all?
(Mr Lloyd Jones) We would question the whole basis
of charges, not because we are not aware of the potential problems
of the environmental damage, but what we are saying is that the
existing process of significant improvements and greater efficiency
may well be put at risk.
9. Do you think you are going to get value for
money from the scale of charges which you list in paragraph 7
of your evidence?
(Mr Tompkins) If you look at the charges and compare
them to charges charged by other similar agencies, you see that
SEPA, the Scottish Environment Protection Agency charges around
half what the Environment Agency in England and Wales charges.
In other European countries, to the best of my knowledge, the
charges are not being passed on in full because there is no cost
recovery mechanism within their Environment Agencies. We are seeing
that England and Wales have the highest charges for agriculture
of any IPPC implementation.
10. What is the situation in Europe? You just
made a general point there. Are the charges being passed on? Are
the European farmers, competitors, being charged for this kind
of work or is it a cost covered by government?
(Mr Tompkins) It varies. I should probably like to
follow that up with auxiliary evidence as I do not know the complete
details. To the best of my knowledge, in the majority of countries
either the government meets the costs or the charges are significantly
lower than in the UK. SEPA are only charging about half what the
Environment Agency in England and Wales charges and other countries
are a lot lower than that.
11. I do not know whether you have made the
same study of the Environment Agency's charges that you have of
the climate change levy which we will come to later on in questioning.
However, your evidence is a bit confused there because it is not
clear what you are actually saying. You are saying that now charges
are going to be lighter, but you are also saying that some Member
States will not be implementing the legislation fully because
they cannot actually carry out environmental inspections.
(Mr Black) If we are talking about IPPC—
12. Which we are.
(Mr Black)—it is worth recognising that as far
as some of our competitor countries are concerned, the size of
their agricultural holdings tends to mean that a lot of them actually
escape under the threshold levels compared to where we are in
the UK. Because generally speaking UK agriculture has higher numbers
on units, then more of our units are caught by the IPPC regulations
above the threshold than applies to some of our competitor countries.
13. You also infer in paragraph 8 that the Environment
Agency is more intent on covering its own backside to avoid being
criticised for a failure to implement any of the regulations.
In other words, it is being bureaucratic about it and the inference
is that that is not the case in Europe.
(Mr Black) The point we are really trying to make
is that we do not believe that it is right that all the overheads
which the Environment Agency have through the whole of their work
should actually be picked up and covered and allocated as part
of the charging process for IPPC. It seems quite ironic that if
the Environment Agency decides to extend their working framework
so they can produce glossy magazines about the environment—and
through my involvement I have gone on their mailing list and there
is quite a lot of stuff which is coming to me—the overheads
for that are actually being apportioned and charged as part of
this buildup of the IPPC charge which to my mind is the wrong
way of going about encouraging an industry which is already looking
to deal with the environment. To try to encourage them and apply
effectively another taxing regime on them does not seem to be
the right way of achieving environmental goals.
14. They are designed to reflect the time involved.
Have you made any assessment of the time likely to be involved
in inspections?
(Mr Black) At the moment, as far as IPPC is concerned,
we are still at the stage of trying to sort out the ground rules
of the way in which it will be implemented and it is very difficult
to turn round and put a cost on the work involved. If I could
use NVZ, nitrate vulnerable zone legislation as an example, certainly
the burden on individual farms to deal with all the paperwork
and the additional administrative burden and being ready—I
have an inspection coming up on our own particular unit next week
and I have had to set aside a day to be with the inspector—plus
all the extra work of other people within my organisation having
to keep more meticulous records and make sure that they all add
up and fill the requirement, is an additional burden.
15. It could be replied though that the ones
most in need of inspection are the most messy and the most messy
are likely to be the least efficient units.
(Mr Black) And possibly the smallest.
16. Which? Are you saying that the smallest
are always the messiest?
(Mr Black) No, I am not. It is possible and the way
in which the legislation is set up it does not actually address
that issue. In terms of proportionality, we are talking about
a heavy cost burden, which actually is not necessarily going to
achieve the overall goal. A more open, agreed method of voluntary
activity would probably achieve more because we could spread that
on a wider set of units.
(Mr Tompkins) On the implementation across Europe,
which was the main thrust of your question, it is partly covered
in our paragraph 9 and there is a reference there to a European
Commission document which implies that in the UK we tend to gold-plate
our legislation. If you want us to give you further details on
the European situation we can do.
17. That would be music to my ears as someone
who always feels that we are being cheated.
(Mr Tompkins) I would not phrase it like that but
there are differences.
(Mr Lloyd Jones) We will give you the factual information
to the best of our knowledge and ability.
Chairman
18. The charging regimes are a matter of subsidiarity
so each individual state can decide how it recovers its costs
or whether it recovers its costs.
(Mr Tompkins) Yes.
(Mr Black) Yes; indeed and we have decided on a full
cost recovery system and other Member States may not be operating
that to that extent.
19. Any detailed information on that to which
you have access would be appreciated by this Committee. Similarly,
I am also concerned about the debate about numbers. The size of
units is laid down in the directive; that was negotiated by the
Government and that is laid down. Both your evidence and the evidence
from the Government suggests that there is considerable uncertainty
as to how many units are going to be caught by IPPC. In fact the
Government say in their memorandum that consultation suggests
the number of farms affected may be considerably higher than initial
estimates. You estimate some 500 higher at 1,500 installations.
Is that your most recent estimate? Can you update that figure
at all?
(Mr Tompkins) Are you talking pigs or poultry?
| 
