ELIZABETH TRUSS MP Constihreney Westminster ??ice: The Limes House of Eottunons 32 Bridge Street Westminster Thetford - [option SWIA ilAA Norfolk IP24 3AG Tel: GED 1219 1151 Tet; r1134: yrs? 345 HDUEE DF EDMMUHS SWIA 0AA Rt Hon. Gwen Petersen MP Department of Enyironment, Food, and Rural Affairs, hlobel House, 1? 5m ith son are,_' . DEFHA RECEIVED - -sntr2u12 l- -.- CCU Posregosi: 5W Congratulations on your appointment. Monday, 24 September Edi: I am writing to alert you to a major issue for the future sustainability of the pig industry. Local biomass subsidies are pushing up the price of straw, used for bedding, which Is putting pig farmers out of business. It is a cause of concern that this will cause pig farmers to sacri?ce welfare standards, and driye trade to oyerseas prod ueers. - - Pig farming is worth to the East Anglia economy, excluding all ancillary trade. The total estimated number of direct pig unit employees is over without considering employment in allied industries i.e transport, feed milling, and pork slaughtering and processing. High-welfare pig breeding In Norfolk, practised by companies like Scot-ts Field Pork, is becoming more and more expensiye as subsidies paid to biomass plants like the one proposed in Enetterton driye up straw' prices. I am worried that the tax payer is subsidising an industry which will create an unnatural imbalance In the market place that will ultimately cost the consumer more at the till. tlyestock businesses that employ the equiyalent of 3,500 full time equivalent workers and run in excess of farms in Norfolk and Suffolk and approximately Edit in the Ereckland District areas are paying up to Elmitonne for straw and are already identifying problems. They utilise tonnes of straw approximately per annum. The proposed Snetterton Bio-Mass Plant will consume 24d,i;iiJEi tonnes of fuel per year, if: cereal straw, Ad is oil seed rape}, which will add to the problem. it is already known that the power station in Ely is haying to source straw from other parts of the country up into the East Midlands. As you can see from the attached graph of British Hay S: Straw Merchants? Association data, other than a small peak in Edd: straw and hay prices remained fairly consistent from someone. In the past three to four years there has been a signi?cant rise: current prices are almost double what Fwd? e?itndedi Weathers-ted? H?ehrr'ie': ELIZABETH TRUSS MP Certsrirueney Q?ee: Westminster The Limea Hence :1me 32 Bridge Street Westmiuatcr Thetferd London SW19. ewe Nerfell: IP24 3AG Tel: ?1211} 1'2 19 1-151 HDUSE ewe Tel: 01342 '15? 345 their were in This reflects the lack ef supply which has fer-med liuestuck farmers tn ?isid' up the prices. i met ?in lulu te discuss this and he assured me his department would undertake a jeint inuestigatiun with DEFHA tn examine the effect of the biomass subsidies en straw prlcesi wuuld be grateful fer an early meeting with yen in discuss this. This issue is an eppertunitv tn save taxpayers? muneir and help Britain. 1-.- 9m; (QM Eilaaheth TrussMP Deparbnent - I for - bel Ho 1' oesse 3355?? I -. Fm 3? Rural Am?? 1? square helpline@defra.gsl.gov.uk London SW1P I Elizabeth Dur ref: House of Commons London swra oars - . I sore From David Heath GEE MP I Minister of 5 er Agribulture and Food Thank you for your letter of 24 September to the Secretary of State about the impaot of rising straw'oosts on the UK pig industry. I am replying as tho Minister responsible for this policy area and am sorry for the delay in doing so. ?tr . . . Bioenergy is expected torplay-a key role in meeting tho Govemment's legally binding oomntilrnent under the Renewable Energy Directive to generate 15% of the UK's energy from renewable souroes by 2020. It will also help in meeting our carbon reduotlon targets. Exoluding biomass from the energy mirr would slgnitloa'ntly inoreese the post of desarbonising our energy Straw is one of the many different types of biomass fuels that sen be used by power stations but we do recognise that it has other valuable uses apart from energy generation. We are keen that potential impacts on non-enemy sectors are addressed and managed. BEBE: is working with Defra and other Government Departments. advisory and delivery bodies. and industry and environmental stakeholders. to draw up a Eloenergy Strategy. This aims to set out a etl'etegio framework for the use of bioenemy in order to aohiave the seat effeetlve delivery of our EIJED goals in a way that is with other objectives aeross the eoorionty and longer term oarbon reduction ambitions to . 205D. Among the issues that will be looked at are the consideration'ot the impacts of using biomass for energy against alternative uses and the potential impaot on food and food production. We are aiming to publish the Strategy in the spring. - . I understand the dit?oulties that pig famters'are ounently enoounten'ng with rising input oosts. aspreoiate the importanoe of pig farming to the East Anglia eoonomy. and the oountry as a whole. and am aware of the particular-ooneems that livestook farmers . have about the potential availability and seat of straw. . Defra?s priority is to support British fanning and enoourage sustainable food produmion. We are oommitted to supporting pig farmers as. they oontinue to build on progress made by the Pig Meat Task Foroe on improving relations between tanner-s and retailers. We are also working with member States in Europe and the industry to ?nd ways te impreve the situatien fer predueers in the leng term ttseug'h dissussiens in the Cemmissien?s Enlarged Pig MeatAttvis'ery Greup. Whilst straw represents a relativ?ly miner preperb'ee ef pig predestien seats, at a time when margins are already very tight. it is an added sensem fer'fanhers.. Elf eeurss.- straw is net essential fer pig prbdustien but I appreeiate that seme predusers prefer te use straw en the basis that it is mere dif?sult te seuree alternatives fer bedding. The prise fer shawls highly variable dependent upen lesatien. and leeal supply and demand. Arable farmers matte daeisiens en whether te bale er sell straw. at set it ferr ineerperah'en bask lets the seil. based en the esenemies.? I understand that generally a letter prepertien ef straw in the eastern eeunties is baled sempared te the nerth and west ef the Mush straw is hdeed pteughecl bask inte the sell. This eeuld ef seurse prevlde an altemative'searee ef straw if demand inereases. These pig fam'ters whe prefer te use straw fer bedding may wish ts sunsider entering inte eentrasts with arable farmers te ensure adequate supplies are available and manage petential risks. Latest prises fer hay and straw shew that prises have depressed in?the last seuple ef menths and that they are lewer than the equivalent menths in 2:311. These prises ean be feund en the Defra website at: - 1 faenlfarrn ablesmm at Latest. estimates suggest that after hive years ef belew average perfermanee, straw .- earry eut seme analyses inte the fasters affecting straw prises and are in sentast with i ef?sials in Defra. I will ensure that they keep yes Informed sf empress. esvle HEATH segue Background Liz Truss has written expressing concern about the impact which biomass energy demand is having on straw prices for local farmers, in particular pig farmers, and the availability of land for food production. [How much straw is produced in the What has happened to straw prices nationally, what is driving them, how much is biomass demand to blame nationally? Is there evidence of localised price increases near straw burning plants? What is the scope and timetable for the NFU report?] She met ?earlier in the year. He said that if the pig producers were able to pull together some evidence of adverse impacts, DECC would look at it. In correspondence since, DECC have said: am happy to reiterate offer to have officials look at any evidence you may be able to collate that the use of straw for bioenergy is impacting regional straw prices. Usefully, though, I understand that the NFU has agreed to look into this matter. Given their direct contact with the farming community, I would suggest that they are best placed to pull together the type of detailed regional information that is necessary. The NFU are in contact with Defra officials on this matter, who, in turn are in contact with mine. I will ensure that you are kept abreast of progress in this matter.? Recent Norfolk activity: On 10 January, the 40MW straw and waste wood plant for Thetford, Norfolk was refused planning permission. In April, residents of Feltwell, Norfolk voted against plans for the parish to lease land to REG Bio-Power for the building of a biofuel power plant, based on used cooking oil. Turnout for the poll was 30 per cent, of which 75% were opposed. The parish poll was called for after 650 people signed a petition against plans to lease land to REG Bio-Power UK off Old Brandon Road. A planning application for the land was entered by REG Bio earlier this year, but has now been withdrawn. On 11 June, Iceni?s 40MW straw plant for Snetterton Norfolk was granted planning permission. lceni said their scheme is expected to create 80 permanent jobs. The project is supported by Breckland Council?s economic development team, in part because it will increase development potential in an area where electricity grid connections are currently poor through provision of a substation. BRIEFING ON USE OF STRAW FOR BIOMASS FOR MEETING WITH LIZ TRUSS MP Points to make 0 There are divergent views amongst farmers over bioenergy, with some seeing significant opportunities while others see threats. For example, livestock farmers are installing anaerobic digestion (AD) plants in response to energy incentives. Cereal farmers are benefiting from increased demand for a wide range of crop residues and for perennial energy crops on lower quality farmland. Cereal farmers are already supplying straw as an energy feedstock under contract, or are negotiating to do so in the future. These farmers would be likely to resist strongly any proposals to reduce energy subsidies for straw. The NFU are doing analysis on the impacts of increased demand for straw for energy and we will need to take stock in light of that. The evidence we have at the moment suggests that there is a surplus of straw nationally, enabling some to be used for energy. Straw for biomass is still a low proportion of total production and is, in the main, located where there is a surplus. Analysis suggests this is not likely to change at current levels of incen?ve. Nationally around 6 million tonnes is used for bedding and feed annually. Around 8 million tonnes is returned to the soil only some of that is needed for soil condition purposes, the rest is ploughed in because it has not historically been worth baling. - Prices will be dictated by a host of factors affecting availability, including the weather. a The Government proposes a cautious approach to new dedicated biomass power, which includes a cap on the number of plants without CHP. As a result, we don't anticipate a significant expansion of straw-fuelled plant. Quick read out from the meeting with Liz Truss this evening: Focus of the meeting was the use of biomass in AD plants. LT noted the high quantity of applications she was seeing in her constituency. These are using straw and oil seed rape. There is a knock on effect on the price of straw which will impact dairy and pig farmers. LT believes the high use of straw in AD is a result of high subsidy. explained his support for AD as means to turn waste to energy farm slurry). Some crops may be needed in the process ?but he did not support AD based entirely on crops. explained that Defra will be carrying out a project examining the impacts of energy on the rural economy and environment; AD would be included. Also explained that this will feed into the wider DECC review on renewable. But he also suggested that LT should be speaking to DECC and HMT Ministers about her concerns on subsidy levels. LT asked if she could mention the study to her local press. 803 said yes, on basis that he had already spoken about the study at the Conservative Conference have asked her Parly Office for sight of draft press lines before they are deployed]. LT then spoke about sugar quotas. She has been approached by British Sugar who are concerned by the phasing out of quotas. 808 was robust in explaining his support for the current EU position of phasing out subsidies by 2015. British producers should be able to remain competitive by improving efficiency. But he notes the FRIDE attempts to extend the timeframe to 2020 and the risk of being outvoted in Council. Finally LT mentioned the Kings incinerator. The 808 explained this was a planning matter. LT will be speaking to Eric Pickles. Deputy PPS and SP8 to the Secretary of State Defra The Secretariat does not keep recorded Officiais should consider whether to save ibis email in their formal record repository, Confer): Knowledde Transnarencv and http? intranet/workinq/information! record Sid efault.asp if you need any farmer advice on what records to keep