Northern Irish mushroom growers are struggling to compete following the reduction of a controversial renewable heat incentive (RHI) that saw millions paid out to non-genuine applicants to the scheme.
Launched in 2012, the RHI scheme offered businesses financial support to invest in biomass boilers under a 20-year contract. Rates were halved following a national scandal, with allegations of farmers applying for the funding with no need of the boiler, and the publication of RHI beneficiary names and received payments in local press.
Northern Ireland’s Department for the Economy and its then minister Arlene Foster – now First Minister and DUP leader – was one of those at the centre of the scheme, which now faces allegations of incompetence, as the unaudited scheme was open to abuse, as well as a legal challenge to the reduction of subsidies.
A court hearing that was due to take place this week and will decide whether it was legal for the department to cut RHI payments has been delayed until November.
In the meantime, growers who had subsidies halved overnight now face subsequent cash flow issues, compounding challenges from higher input and labour costs and the threat of cheaper imports.
Already operating on tight margins, mushroom businesses used the incentive to create efficiencies and offset prices, enabling them to compete better with cheaper imports, according to Elaine Shaw of producer organisation Northway Mushrooms.
“The benefits of the RHI did not stay with producers. Now the price is set, based on this additional income. Compost prices have gone up, labour has gone up,” she said.
Frank Donnelly of Keenaghan Mushrooms said: “We priced the effect of the RHI in, and then they took away half of the subsidies.
“It wasn’t abused by the mushroom sector. It moved us in the right direction into renewables and also offset the price by enabling more efficiencies and allowed the industry to compete with cheaper imports.”
Donnelly, who had already invested in a biomass boiler for his mushroom farm and used the RHI to purchase a second smaller one, has had to let his team supervisor go as a result of losing the additional cash flow, taking on the extra hours himself.