Farm Fuels: Grant for recycling of wood waste

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A decision made 9 December 2011:

Decision Reference: MD-E-2011-0202
Decision Summary Title :	Provide support funding to Farm Fuels		Date of Decision Summary:	7th December 2011
Decision Summary Author:	Rural Team Manager		Decision Summary: Public or Exempt? (State clauses from Code of Practice booklet)	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	n/a
Written Report Title :	Provide support funding to Farm Fuels		Date of Written Report:	7th December 2011
Written Report Author:	Rural Team Manager		Written Report : Public or Exempt? (State clauses from Code of Practice booklet)	Public
Subject: Farm/rural diversification enterprise, recycling 900 tonnes of wood waste per annum efficiently and profitably.
Decision(s): The Minister agreed to grant monies to Farm Fuels to enable the purchase of equipment required to develop a unique rural enterprise processing and recycling waste wood chip. The total budget will be £50k.
Reason(s) for Decision: Prior to Farm Fuels existence the whole of the Jersey’s wood waste was processed by TTS at public expense, involving a heavy capital and labour commitment plus the cost of shipping the waste to the UK.
Resource Implications: The allocation of monies to fund this project will come from efficiency savings on other projects. Guidelines for projects requiring approval outside the normal Rural Initiative Scheme process have been followed, to ensure compliance with Financial Direction 5.4 – Obtaining Value for Money from Grants.
Action required: The Minister will instruct the Director of Environmental Management and Rural Economy to process the payments.
Signature: Senator Alan Maclean		Position: Minister for Economic Development
Date Signed:		Date of Decision (If different from Date Signed):

Farm Fuels: Grant for recycling of wood waste

ECONOMIC DEVELOPMENT DEPARTMENT

RURAL ECONOMY

Provide support funding to Farm Fuels

Purpose of the Report

To approve the expenditure of monies to enable Farm Fuels to purchase necessary equipment to complete the processing line designed to use wood chip produced from waste pallets into recycled products.

Background

Farm Fuels is a unique recycling business and represents the only example of this type of farm/rural business diversification in Jersey. Farm Fuels currently processes approximately 14,000 pallets per month creating approximately 900 tonnes of waste wood per annum. Waste pallet processing produces 300 tonnes of kindling and potentially 300 tonnes coloured mulch and 300 tonnes animal bedding from the waste wood chip. The kindling wood production line is currently in full operation, creating large amount of waste wood chip as a by-product, however the coloured mulch/animal bedding production line needs approximately a further £80k expenditure to allow the business to develop and function efficiently.

Currently large volumes of wood waste are being stock piled at the production site and elsewhere around the Island owing to the mulch and animal bedding line not being an appropriate specification to operate to the desired capacity. Farm Fuels is unable to fund the full cost of the above development owing to cash flow problems associated with an unexpectedly poor year for potato sales and the current financial downturn which is putting development and future of the Farm Fuels enterprise at risk.

An in depth financial assessment of the application has been undertaken to demonstrate the need for a grant, including analysis of his farm business accounts supplied with his Single Area Payment 2011 application, the assessment of business plans supplied to the Land Controls section to support a planning application for a new agricultural building and financial and planning information supplied with a 2011 Rural Initiative Scheme application.

In addition, guidelines for projects requiring approval outside the normal Rural Initiative Scheme process have been followed, to ensure compliance with Financial Direction 5.4 – Obtaining Value for Money from Grants.

Discussion

Prior to Farm Fuels existence the whole of the Jersey’s wood waste was processed by TTS involving a heavy capital and labour commitment plus the cost of shipping the waste to the UK.

This waste stream is now collected and processed on a commercial basis, in line with the States Solid Waste Strategy, which currently requires a modest amount of capital investment to turn Farm Fuels into a sustainable, long term, profitable business.

Recommendation

The Minister is asked to agree to support monies being provided to Farm Fuels to enable the purchase of equipment required to process waste wood chip efficiently. The total budget will not exceed £50k.

Written by:	Rural Team Manager

Approved by:	Director Environmental Management and Rural Economy