Select Committee on Agriculture Minutes of Evidence


Examination of witnesses (Questions 70 - 86)

TUESDAY 1 FEBRUARY 2000

MR R J BANSBACK, MR M ATTENBOROUGH, MR A JORET and MR M SHARP

  70. In order to reduce emissions by processing the manure you are going to have to increase energy.
  (Mr Joret) Absolutely.
  (Mr Sharp) Yes and you have to look for the best environmental option there and at the moment that would appear to be using energy to dry manure and also improve the welfare of the birds. That is going to have much greater benefits than the very small additional increase in CO2 emissions from this type of system.

Mr Mitchell

  71. The Government is proposing offsetting reductions in employers' national insurance contributions to offset the impact of the climate change levy. Is this of any real benefit to employers in pigs and poultry?
  (Mr Bansback) The indication—and this has been mentioned by the NFU—is that it is potentially a burden on the intensive pig farming sector. We are looking at another element of climate change levy on the meat processing sector, which has not emerged yet and I know this is not the subject of your discussion. There, there is more likelihood of it being neutral in that sector, but in intensive pig it is going to be a net burden on the industry.

  72. How about poultry? Is it chicken feed as far as you are concerned?
  (Mr Joret) Within the egg sector we did an analysis of a company I actually work for and it would still be a net cost to us. Although the reduction in national insurance should not be ignored, because we are quite large employers of labour, and within agriculture and horticulture, as mentioned this morning, the same in the poultry industry, a lot of people are actually employed in the sector. However, that assumes that we do get the full 80 per cent rebate and our concern is what sort of targets we would be expected to work to.

  73. The MLC tells us it "... welcomes the opportunity to be involved in the creation of general binding rules for the pig farming sector". How responsive is the Environment Agency to this proposal to develop alternative approaches?
  (Mr Attenborough) We are in discussion with the NPA, the NFU and indeed the Environment Agency. At the moment we are awaiting a response from them. We have suggested, as I indicated before, that they actually come around a number of units and gain an idea of what is involved in indoor pig production and get a feel of what we have suggested in our letter which is that five hours is more typical for a study rather than five days. We are awaiting that response.

  74. Poultry producers I saw and the people I have talked to were well aware of the environmental problems they may cause and voluntary systems are already in force. Do any of those voluntary systems which exist now or could be developed achieve the objectives of the IPPC?
  (Mr Joret) We believe so. The trouble here is that a lot of improvements are expensive, are capital intensive, so they tend only to be made either when you are building new or when you are in for substantial replacement. The life of equipment we would expect to get is something in the order of 15 to 20 years, so it is not something we can keep going back to every day. If you look at the trend over the years, the industry has continuously moved towards more efficient systems and that is often driven by the planning process. To get planning permission for these units, you very often have to go through environmental assessment and that leads you towards these things. It is moving in that direction but one of our big fears is when IPPC applies what happens to all these farms which are not at this point in time at best available technique. It is not just the cost of permits, it is also the potential cost that we have to bear at some stage when we bring these up to the best technique.

  75. And who are presumably not making enough money, if they are making any at all, to finance the investment which would be necessary.
  (Mr Joret) Exactly so; yes.

  76. That is the essence of the problem.
  (Mr Joret) Yes, indeed.

  77. Are there any alternatives to the climate change levy which could bring about a reduction in use of energy and the emission of greenhouse gases?
  (Mr Attenborough) For the indoor pig sector energy usage in itself is not one of the major elements of the cost of pig production. Nevertheless it is an important element therein. The opportunities there for energy reduction do need to be studied and that is why we have actually made a suggestion in the review which was actually done by the Environment Agency to do with IPPC that at the same time an opportunity is looked at in terms of carbon fuel usage, for want of a better word, to get a feel of that and confirm that across a range of units. That would enable a baseline to be set and therefore the opportunities for further reduction to be considered. My colleague has talked about the development of IPPC just at a time when the industry is hopefully coming out of the worst crisis it has ever had. Clearly one opportunity for energy reduction would be looking at new buildings which are better insulated, where better control of heat loss for example could be made, but obviously tied in with that is capital investment. At the moment, you have heard of the losses cumulative and weekly which the industry is serving so it is not easy for the industry to face up to substantial investment at this moment or indeed perhaps for 18 months to two years.

  78. How about poultry? You are presumably bigger users of energy? Are there any alternatives which you see?
  (Mr Sharp) I am not sure they are a bigger user of energy but certainly energy is used.

  79. Bigger than pigs.
  (Mr Sharp) The two main energy requirements are welfare and reducing ammonia emissions. There are not really any alternatives there, but there are certainly efficiencies which can be made using modern technologies. For example, warm exhaust air can be dehumidified and then used to dry manure in areas which have been heated up by the birds and the use of efficient equipment. It always has to be done with the main criterion in mind of bird welfare.

  80. The Egg Industry Council said it wants an integrated approach to pollution control. Do you think the requirements of the IPPC and the climate change levy can in fact be integrated with each other?
  (Mr Sharp) The way they can be integrated is by a 100 per cent rebate on climate change for energy use which is used either for welfare or for reducing emissions of acid gases like ammonia which are perhaps a greater problem than the small reductions in CO2 which you would get.

  81. How would that apply? Would that apply as poultry farmers implement European directives or instal new cages or whatever? What is an enriched cage, by the way?
  (Mr Joret) It is a cage with a perch, a nesting area and a scratching area.

  82. Like Parker Morris standards for council housing.
  (Mr Joret) Probably so; yes.

  83. Would this rebate be phased in with new investment? Is that part of the argument?
  (Mr Sharp) One would hope the rebate would be there for existing units as well, exiting units complying with IPPC, actually using energy for drying manure and emission reduction.

Chairman

  84. We have reached time. There is one question I just wanted to ask the egg industry. I know the answer for pigs. It is about import substitution. We have heard about the crisis in pigs and we know that it is all too easy for our competitors to get their pig meat into the UK. You have given some very dramatic figures for the losses in the egg industry of an average of 1p an egg at present across the industry on an ongoing basis.
  (Mr Joret) That is right.

  85. What are the opportunities for import substitution for eggs if those losses continue?
  (Mr Joret) They are considerable. It is probably not likely to happen to eggs you would buy from the supermarket shelf, which is about 62 per cent of all eggs consumed. The remaining eggs consumed go through both the catering and particularly the processing sector, when we are moving pasteurised liquid egg about. It is in those sectors where price is paramount in terms of the sale and that is the area where we potentially would see the export of our industry. There is already some import/export trade in that area and if we become too uncompetitive clearly that will increase, that is both with us to the rest of the EU, because they do not necessarily apply the rules in the same way that we do, but also in particular to third countries. It is very easy to ship dried egg powders for example all the way round the world and that happens already. Only about 20 per cent of the dried egg powder we use in the UK is actually produced here, the rest of it will be coming from places like America, India, China, very big producers of that commodity.

  86. I should have said at the beginning, it was very remiss of me, excellent written evidence for which we are very grateful; it has been very helpful and very thorough. Is there anything you want to add which you have not covered either in your written evidence or in this oral evidence session this morning?
  (Mr Bansback) Just a concluding comment that the industry wants to take a constructive approach to this and we want in our discussions with the industry and the Environment Agency to find a way out of this. I hope that the severe comments we have made on the cost and the desperately difficult times of the industry do not take away from the fact that we want to find a satisfactory solution which is in the interests of the environment as well as the industry.
  (Mr Sharp) We would very much concur with that view.

  Chairman: On that note of consensus, I thank you very much indeed. We are very grateful to you.


 
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