Welsh grants add to egg producers woes

British Free Range Egg Producers (BFREPA) chairman John Retson has appealed for governments to act responsibly after the Welsh Assembly announced that more than ’70,000 in grants had been awarded to aid the expansion of two free range egg units.

The grant is being provided through the Rural Development Plan for Wales, which is funded by the Welsh Assembly Government and the European Agricultural Fund for Rural Development: Europe investing in Rural Areas. A statement issued to announce the grant said the money was ’aimed to boost egg production in Wales.’ But it comes at a time when there are already too many eggs on the market in the United Kingdom. John Retson expressed his concern about the development.

’We hear this is happening,’ he said, ’but I would put a serious word of caution out to people because we have already got three million too many layers. We are in the worst situation in free range since the Edwina Currie days. When it comes to grant money, surely there has to be some responsibility.’

The packers’ organisation, NEMAL, is warning that it could be the middle of 2012 before the egg market returns to balance. It has told BFREPA that the industry needs to reduce free range bird numbers as soon as possible, yet grants seem to be encouraging more free range expansion despite all the warnings from the industry.

’Why should governments be spending more money like this on an industry that is already in oversupply,’ said John. ’I cannot stop people going into free range if they want to do so with no contract, but they need to know that there are already three million birds too many and government does need to be responsible when it comes to dishing out money to an oversupplied industry.’

A press release issued by the Welsh Assembly Government to publicise the award of the grants declared ’there will be no shortage of Welsh egg’ thanks to a new investment of over ’830,000 aimed to boost egg production in Wales.’

The release said that two egg producers had benefited from more than ’72,000 through the Processing and Marketing Grant (PMG) scheme, funded through the Rural Development Plan for Wales 2007-2013. The Processing and Marketing Grant scheme supports farm and forestry businesses, food and drink producers and processors to add value to their products and become innovative and competitive in global markets.

One grant went to the Abberley Partnership in Llandrindod Wells, Powys, which the release said had expanded its business by adding facilities for a further 12,000-bird flock, doubling its output of free range eggs. It said that ’27,262 of PMG funding had helped to pay for the purchase and installation of equipment to process an additional 3.2 million eggs a year.

Another grant was awarded to Trewern Isaf Free Range Eggs in Llanrhaeadr Yr Mochnant, Oswestry, which the Assembly said had set up business to produce and package free range eggs. It said a total of ’45,643 PMG funding contributed to the installation of a packing room that would enable a hygienic, efficient way to package the eggs and a 16,000-bird unit, which will produce on average 30,000 dozen eggs per month.

The press release said that the two family run businesses saw the poultry units as a source of additional income, enabling the next generation to remain at the farms.

The Ranger magazine contacted the Welsh Assembly Government to ask why it was awarding such grants at a time when the UK market was so severely oversupplied. The Assembly subsequently provided us with a prepared response, which seemed to be at odds with the initial press release. It said the grant would not help increase output, even though the press release said that the Abberley Partnership was doubling its output of free range eggs and that the grants were ’aimed to boost egg production in Wales.’

The statement issued to the Ranger read, ’The Processing and Marketing Grant (PMG) referred to was specifically given as a contribution towards the grading of eggs so that the producers can add value to their products, therefore providing a boost for the sector in Wales. These grants are not to instigate increased output of produce.

’All applicants for PMG support have to demonstrate clearly that a normal and viable market exists for their products, and must have supply contracts in place before a grant is offered. Market conditions at the time that grants are offered are considered.’

In the original press release there was a comment from Elin Jones, Minister for Rural Affairs in the Welsh Assembly Government. He said, ’The processing and marketing grant scheme is an effective way of supporting companies like these who are important to the economy of Wales. In providing this support we are building and sustaining competitive, profitable and sustainable farming and food industries that are of benefit to the rural communities, the economy and the people of Wales.’

Ross Abberley of the Abberley Partnership said, ’The PMG grant supported our business greatly, enabling it to expand to produce over six million eggs a year and creating a sustainable food production in the heart of Mid Wales. It has also safeguarded my brother and myself to remain in the business, and to proceed to grow for future generations.’

Sarah Lewis of Trewern Isaf said, ’The PMG grant allowed us to diversify the business into woodland free range egg production. I was able to fulfil my desire to leave my management role in a bank of 23 years to manage and run the free range unit. We have also been able to employ a couple of part time staff, which in a rural area where jobs are few and far between, must have been of some benefit to the local community. We were grateful that the grant was agreed, as it certainly made the initial costs and subsequent cash flow forecasts more palatable, and perhaps without this assistance the free range unit would not have been considered as a viable diversification project.’

Such grants have come in for increasing criticism since it became clear that the UK egg market was getting out of balance. The oversupply in the market has been blamed largely on too many new entrants flooding into the free range industry.