Poultry sector expansion fuelled by more than chicken feed
The Renewable Heat Incentive coincided with an unprecedented expansion of north's poultry sector driven by multinational processor Moy Park and several Stormont departments. John Manley reports
THE list of beneficiaries of the non-domestic Renewable Heat Incentive (RHI) remains under wraps but it is understood that it contains a high number of poultry farmers.
The brother of Arlene Foster's special adviser Andrew Crawford, whom The Irish News revealed a fortnight ago as a claimant of the scheme, is one such chicken farmer based in Co Tyrone.
There is no suggestion of any wrongdoing or abuse of the RHI on the part of Moy Park or its hundreds of suppliers across the north but it appears the way the scheme operated was particularly advantageous to both, as it helped ensure normally tight margins were ameliorated by a taxpayer-funded subsidy, totalling tens of millions of pounds.
Deti's delayed launch of the regional RHI in 2012 came not long after the Stormont-sponsored Agri-Food Strategy Board set out its plan to increase exports of beef, dairy, pork and poultry.
The plan was supported by then First Minister Peter Robinson, Deputy First Minister Martin McGuinness, Agriculture Minister Michelle O'Neill and Enterprise Minister Arlene Foster and at its heart was a call for "integrated supply chains" that forged closer links between primary producers and processors.
The RHI was particularly useful to poultry farmers – or 'growers' as they are known in the industry – because heating the huge sheds in which the chickens spent their short lives with biomass (wood chip pellets) ensured better quality meat and reduced the amounts of ammonia produced.
A Moy Park spokesman previously told The Irish News: "We have been advocating the use of hot water heating systems across our poultry production in England and Northern Ireland for many years.
"These systems produce a dry heat which creates a healthy environment for the chickens."
Ordinarily this was a costly process but with the help of lucrative RHI subsidies, poultry farmers were able to top-up their income significantly.
The Audit Office's report from July this year into the overspend caused by the botched RHI notes: "In some cases such as in the poultry industry, it is possible that a biomass boiler could be used almost all of the time in order to replace an oil boiler.
"In an extreme case of the boiler being operated 24 hours a day and only being stopped for servicing, as shown in very large profits could be realised, even though the use of the biomass boiler would still be in line with the spirit of the scheme."
Soon after the RHI launch, of which initial uptake was comparatively slow, came the horsemeat scandal, leading to increased consumer demand in Britain for 'locally-sourced' chicken, which included that produced across the Irish Sea in Northern Ireland.
Growing demand, a generous energy subsidy and the 'fast-tracking' of planning applications for poultry sheds created optimal conditions for the poultry sector. In addition, Arlene Foster and her DUP colleague Simon Hamilton – then Stormont's respective economy and finance ministers – collaborated to create the ‘Agri-Food Loan Scheme’. This meant that in many instances farmers expanded their businesses through taxpayer-guaranteed lending from banks, which was initially tailored specifically for poultry producers.
A report in one local newspaper from 2014 publicising First Trust's lending through the scheme tells how a Moy Park supplier borrowed £180,000 for a "state-of-the-art biomass heating system".
"I approached First Trust Bank when I heard they fund energy efficiency schemes, as well as having a dedicated fund for supporting agriculture based businesses," the farmer enthused.
At the same time, Moy Park was holding well-attended meetings to publicise the opportunities available to farmers and boasting in the press how it was experiencing "phenomenal interest" from farmers and had more than 250 new poultry sheds in the pipeline.
The Irish News this week asked Moy Park whether it wished to comment on how fortuitous circumstances had created an environment where its costs and those of its suppliers had been lowered significantly and that this had helped fuel a rapid expansion of the north's poultry sector.
The company declined to comment.