A leading free range egg producer has warned that Welsh Government grants could result in the egg industry suffering the same financial crisis as the dairy industry.
John Campbell, chairman of Glenrath Farms, one of the biggest producers of free range eggs in Europe, was reacting to news that millions of pounds of new grant aid was being offered for new free range egg production in Wales. He told the Ranger that he feared the grants would result in over-expansion of the free range sector.
“We could end up with a massive surplus because of Government interference,” said John. “The market should decide.”Dairy farmers have been taking to the streets across the UK to protest about the price they receive for their milk. They say they are losing money on every pint they produce, and John Campbell says that grants handed out by Government in Scotland have been partly to blame for the crisis north of the border. Scottish Government grants to dairy farmers led to the expansion of the milk industry, he says.
“The backbone of Scottish agriculture, dairy farmers in Ayrshire and Lanarkshire, couldn’t compete with the big dairies. We got an oversupply of milk because of Government interference with the market.”
Grants have been handed out previously for the installation of free range egg units in both Scotland and Wales. “One big producer in Scotland got £1.6 million from the Government,” said John. “I admit I got some money, myself. But the grants resulted in over-expansion. Fortunately, the Scottish Government recognised what happened and that has now been restricted. But when I read that the Government in Wales was giving out new grants, I just thought that the egg industry could go the same way as dairy.”
The grants being made available for free range egg production fall under the new Welsh Rural Development Programme 2014-2020, which is worth £900 million in total - £400 million provided by the Welsh Government; the rest by the EU. The Rural Development Programme includes four new schemes, and applications are being invited for the first release of grants from these new schemes worth a total of £26 million. Some £10 million of that is open to new free range egg production.
A spokeswoman for the Welsh Government told the Ranger that two of the schemes - the Food Business Investment Scheme and the Sustainable Production Grant - were open to free range egg production applications. A total of £8 million is available in the first release of grants from the Food Business Investment Scheme and £2 million from the Sustainable Production Grant. The deadline for the submission of full applications is the end of May next year.
John Campbell is not alone in expressing concern about the plan to offer grants for new free range production. Robert Gooch, director of policy with the British Free Range Egg Producers’ Association (BFREPA), has said he is worried that the grants may encourage over-production of free range eggs. “It is a bit of a concern that production may be driven not by market signals but by grants. Market signals suggest that we need to be holding back on production,” said Robert. A recent flock survey by BFREPA indicated that production could increase by as much as 15 per cent during the coming year - double the increase identified in last year’s survey.
Of the two Welsh grant schemes open to free range egg producers, the Food Business Investment Scheme is designed to help primary producers of agricultural products in Wales to “add value to their outputs by providing support to those businesses that do first and/or second stage processing activities.” A spokeswoman for the Welsh Government said it was also aimed at improving the performance and competitiveness of businesses; responding to consumer demand; encouraging diversification, as well as “helping businesses to identify, exploit and service new emerging and existing markets.” She said the Food Business Investment Scheme covered capital investments in processing equipment, along with some associated costs, and supported projects that offered “clear and quantifiable benefits to primary producers, either directly or indirectly, in the agriculture sectors providing the raw materials.”
The Sustainable Production Grant, she said, was designed to help farmers in Wales to improve the economic and environmental performance of their agricultural holdings. Its objectives were to increase on-farm investment, to increase technical performance, increase on-farm production efficiencies and to increase on-farm resource efficiencies. “The SPG covers capital investments in equipment and machinery, along with some associated costs, and supports projects that offer clear and quantifiable benefits to improve the overall performance and sustainability of the agricultural holding,” she said.
The Rural Development Programme was adopted by the European Commission in May this year and is a seven-year investment programme, which aims to “improve resilience and promote transformational change in agriculture, forestry and rural communities.” The Welsh Government says it will help to improve competitiveness in the agriculture and forestry sector, safeguard and enhance the rural environment and foster competitive and sustainable rural businesses and thriving rural communities.
