Growers and the NFU have slammed the government for overlooking primary food production in the new Energy and Trade Intensive Industries (ETII) scheme it announced last week.
The NFU said it was “frustrated” the scaled-down 12-month package, which will take over when current government support ends in April, failed to give extra support to sectors such as horticulture and poultry, despite intense lobbying.
All businesses are eligible for a new Energy Bills Discount scheme, which offers a unit discount of up to £6.97/MWh for gas and £19.61/MWh on electricity. But horticulture and poultry have not been included in the enhanced ETII support package, which pays up to £40/MWh for gas and £89.1/MWh for electricity.
Announcing a revamp of its support package last Monday, chancellor Jeremy Hunt noted wholesale energy prices were now falling “and have gone back to levels seen just before Putin’s invasion of Ukraine”. But to provide reassurance against the risk of prices rising again, he added the government’s new package would give businesses “the certainty they need to plan ahead”.
However, the new package was derided as “paltry” by industry figures (as reported by The Grocer last week), while the NFU said it was dismayed it had ignored what were already financiall-pressured sectors.
“While we accept farming businesses can’t be insulated from long-term market realities, the government must recognise its current approach seriously undermines our ability to produce food,” particularly in such energy-intensive sectors, said NFU president Minette Batters.
As a result, the NFU has asked for a review of the scheme so that when energy prices do rise in future, there would be support for food producing sectors.
“The omission of horticulture is particularly frustrating,” she said. “What is the justification for botanical gardens to be included in the scheme, but not food grown in glasshouses?
Cut-price energy bailout could further inflate food and drink prices
“We have highlighted repeatedly how energy prices are already threatening next year’s crop of tomatoes, cucumbers and peppers, and the current changes to the scheme seem completely at odds with the government’s own ambition to grow more fruit and vegetables, as set out in its National Food Strategy,” argued Batters.
Her comments were echoed by Lee Stiles, secretary of the Lea Valley Growers Association, who warned the announcement, and its timing, meant it was already “too late for the majority of growers who had already decided to delay planting until after April or not plant at all this year”, due to soaring costs.
It followed a smaller 2022 harvest for the group, when at least 50% of members of the LVGA – the group responsible for growing three-quarters of the UK’s cucumber crop – decided against planting due to crippling heating costs.
Discussing the proposed discount scheme, he said even if growers had been included it may not be sufficient as it was not a price cap, and therefore would not provide “certainty of cost price inflation” after the current support ends.
“Growers have asked government to take a long-term view on renewable energy incentives for British growers in order to replace fossil fuels, however this appears to have fallen on deaf ears in favour of short-term sticking plasters,” Stiles explained.
The Department for Business, Energy and Industrial Strategy declined to comment directly on why the sectors had been overlooked for the ETII scheme.
No comments yet