Fertiliser Costs

Environment, Food and Rural Affairs – in the House of Commons on 8th September 2022.

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Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy)

What recent assessment he has made of the impact of the cost of fertiliser on food producers.

Photo of Mark Spencer Mark Spencer The Minister of State, Department for Environment, Food and Rural Affairs

Fertilisers make up around 9% of input costs into food production. Cost increases may be absorbed at various points within the supply chain, but of course we should recognise that there has been a huge spike because global energy prices are going up. The Government recognise that input costs have increased and are challenging cash flow. That is why we brought forward the direct payments to try to help people with their cash flow, and we will continue to monitor that as we move forward.

Photo of Justin Madders Justin Madders Shadow Minister (Future of Work), Shadow Minister (Business and Industrial Strategy)

Last month my constituents at CF Fertilisers were made redundant. Within days of that happening, the company announced that it was halting CO2 production at its plant in Billingham. I know that the Minister is new in place, but I warned his predecessors again and again that we could not afford to be in such a vulnerable position and that we should have got the company sold to the many people who are interested in purchasing it. I am so disappointed that we have got to this point, because it was completely avoidable. Will he, on behalf of his Department, apologise to my constituents who have lost their jobs unnecessarily and to everyone in the country who will be paying more for their food as a result of this very short-sighted decision?

Photo of Mark Spencer Mark Spencer The Minister of State, Department for Environment, Food and Rural Affairs

I thank the hon. Gentleman for his question. Of course, we do not want the company to be able to exploit the monopoly position it holds within the marketplace. It has ceased the production of ammonia at the plant, but it will continue to produce ammonium nitrate and nitric acid. The Government continue to engage with the plant to make sure we can secure supplies of fertiliser and other products.

Photo of Robert Goodwill Robert Goodwill Chair, Environment, Food and Rural Affairs Committee, Chair, Environment, Food and Rural Affairs Committee

I do not think the situation could be any more serious for farmers in this country, both grain farmers and grass farmers. The UK requires around 2.2 million tonnes of nitrogen fertiliser, and about 1 million tonnes of that came from the Ince plant and the Billingham plant. The Ince plant is shut and the Billingham plant is paused while waiting for deliveries of ammonia in order to switch from North sea gas. In welcoming the Minister to his place on behalf of the Committee, may I ask him to say when the first load of ammonia will arrive at Billingham and when production will commence? There is a real fear that the plant might not start, and then we will really be in serious trouble.

Photo of Mark Spencer Mark Spencer The Minister of State, Department for Environment, Food and Rural Affairs

I thank my right hon. Friend for his question. That is something that we take seriously. We recognise the huge challenge to not only UK agriculture, but other sectors around the country. He will be aware that AdBlue, which many diesel cars up and down the country use, is also dependent on products of a similar nature. We will have to work together as an industry to look at other alternatives. We may have to look back at our ancestors and how agriculture operated in the ’30s and ’40s, with nitrogen-fixing crops and other agriculture methods, to solve some of the challenges that we face.

Photo of Daniel Zeichner Daniel Zeichner Shadow Minister (Environment, Food and Rural Affairs)

I, too, welcome the right hon. Gentleman to his place. I am sure that we will work constructively together, and I look forward to swapping Benches at the earliest opportunity. He knows the effect that high input costs have on farmers, whether that is fuel, fertiliser or labour. I am sure that one of the first questions he put to his civil servants was about the CO2 impacts of the shutdown of those facilities. Rather than just reassuring us, will he publish the Department’s assessment of the CO2 consequences of any shutdown at those plants?

Photo of Mark Spencer Mark Spencer The Minister of State, Department for Environment, Food and Rural Affairs

Of course, we recognise the challenge. I have been in post for 12 hours, so I hope that the hon. Gentleman will forgive me if I have not been able to make a full assessment of the position.

Hon. Members::

Resign!

Photo of Mark Spencer Mark Spencer The Minister of State, Department for Environment, Food and Rural Affairs

It is tempting to resign, to be honest, but I will resist at this moment. We continue to have those conversations. We recognise the size of the challenge. If the hon. Gentleman gives us a small window, we will be able to make a full assessment of where we are at.