Select Committee on Agriculture Minutes of Evidence


Examination of Witness (Questions 73 - 79)

MONDAY 11 DECEMBER 2000

RT HON JOYCE QUIN

Chairman

  73. Minister, welcome again. I hesitate to say this is your last appearance of the year because you never know with this game! We are here on pigs on this occasion. Thank you for coming. We will try and be crisp and to the point. I wonder if you could begin by outlining what responsibility does government have for the pig industry? Where do you draw the line in where you think the government is actively involved, where the government just tries to be a helpful influence, and where you say, "Sorry, chaps, that is your business"?
  (Ms Quin) That is quite a difficult question to answer; it is quite a short question to put. Obviously there needs to be continued dialogue with the industry in order to identify those areas where government can take action and areas where government can at least help to try and improve the environment in which producers are operating. There is a responsibility on government to ensure that European rules are applied fairly and that our own pig industry does not suffer disproportionately compared to the situation regarding the implementation of European rules in other countries, and there is a responsibility on the government to look at the possibilities within domestic agricultural policy to work with and support the industry. However, what the government cannot do, of itself, is prevent all problems that might affect the industry from a variety of factors. And, of course, the possibilities for the pig industry are somewhat more limited than they are for some other agricultural sectors given that the industry is what is euphemistically called a "lightly supported" regime under the Common Agricultural Policy as opposed to other sectors that get more mainstream support.

  74. When you say "make sure the industry does not suffer disproportionately in comparison with other producers", does that mean that when it comes to compliance with regulations and cost of regulations, or in dealing with outbreaks of disease which may also be an occurrence on the Continent that you want to try and make sure that your response is broadly of the same sort of magnitude and at the same sort of level as that received from their governments by competitive producers?
  (Ms Quin) Indeed, and also when aid has either been proposed or seems to be given by other countries which does not seem to us to conform with the rules, to be prepared to approach the European Commission to say so.

  75. It has been put to us that other countries faced with a crisis pay up and then go and ask for permission. Even if permission is refused the money is paid in any case and it is all a bit too late. Is this a line of action which has commended itself to the British Government or does the famous genie of disqualification make it impossible?
  (Ms Quin) Firstly, I do not accept that things are quite as simple as the picture that would be painted in the words that you have uttered. I do not believe that things are as simple as that. I think that most countries are very much closely guided by European rules. All countries face disqualification if they disobey those rules and, indeed, sometimes the European Court of Auditors' reports uncover cases where rules have not been properly applied and payments have had to be given back as a result. There are a number of safeguards in the system which would make the situation you describe an oversimplified one. Nonetheless, we do have to watch very closely what other countries are doing. There are a number of ways in which we do that, both through official contacts and indeed through ministerial contacts, and we need to do as much as we can to make sure that the conditions of competition are as fair as possible.

Mr Drew

  76. Sorry to miss your opening remarks; I am sure I will pick them up later. If I can move us on to the Government's responsibility towards the pig industry. Just in outline, Minister, how would you describe the Government's performance with regard to both the restructuring but also the swine fever outbreaks?
  (Ms Quin) I think we have played an active role and we have certainly had a great deal of contact with the industry. Sometimes the negotiations in order to achieve particular results have taken quite a long time, but there has been no lack of willingness on the part of the Government to engage with the pig industry and to work with the pig industry's representatives. I think this has been particularly true in the fact that we agreed to bring in the pig industry restructuring scheme and negotiate it in Brussels even though that tends to be a time-consuming process. I think also the way we have worked with the industry over the promotion of their products, particularly through helping in terms of the meat promotion campaign that was run by the Meat and Livestock Commission, rather a controversial campaign at the outset but one that certainly drew attention to the quality of the British product. I think, too, the work done by our verification officer and work which has now been taken forward within the Food Standards Agency on much better controls over misleading labelling have borne a good deal of fruit and a number of leading retailers have changed labelling procedures as a result, and I think that consumers are better informed as a result and are therefore able to exercise a better choice about what they buy. I think, also, our overall approach to the Rural Development Regulation is one where we have shown we are committed to bringing in schemes which benefit those sectors of agriculture who do not get mainstream Common Agricultural Policy support. The pig industry, the poultry industry and the horticultural industry and others are beneficiaries of that new approach. We are very keen, as you know, to push that approach forward as part of the overall Common Agricultural Policy Reform.

  77. Can I stay on restructuring, and come on to the swine fever outbreak in a moment. Do you think the 16 per cent figure for the number of outgoers or the capacity is the right figure, or is that too high or too low?
  (Ms Quin) It is the figure that accords with European State Aid rules, which is why the figure exists. We certainly believe that we can meet that in terms of what has already happened since July 1998, which is the period which is considered as the starting period for the operation of the restructuring scheme. Therefore we hope, particularly with the outgoers part of the scheme, that that will be of benefit to many producers who have restructured and reduced capacity, sometimes by a great deal more than that amount, in the last two years.

  78. Can you explain to me how you get to the 16 per cent figure, not in terms of what the EU says, but how you manage the mechanics of that in terms of outgoers and those who stay but reduce their capacity?
  (Ms Quin) In terms of outgoers it is my impression that the 16 per cent figure would be easily exceeded, there is no risk of us not being able to comply with the 16 per cent figure, given the changes that have taken place, with which you are familiar, in the pig industry since 1998. Our discussions with the industry have certainly indicated to us that now that the outgoers scheme is open for business we will receive bids to be able to allocate the money in that particular budget. In terms of the ongoers I think the point is much more germane because, in fact, we would prefer if that requirement of the EU was not there as far as ongoers are concerned. It has been a difficult issue in the negotiations. The Commission have said that this is part of a restructuring programme, and the ongoers element is a restructuring programme. In terms of the larger scale pig producers they particularly wish to see that complied with. It will be more difficult to do it in terms of the ongoers, but given that the ongoers depend on a business plan being put forward, which has a forward-looking strategy, we hope that it will be met. It should also be said that 95 per cent of pig producers will not be subject to that requirement and they will be able to benefit, we believe, quite directly from the ongoers scheme.

  79. If I can look at swine fever, why did the Minister of Agriculture refer to the outbreak in its early days and obviously the cost to the industry as a normal business risk. Was that the right thing for him to say or was that somewhat risky, given that now the Government have responded by providing compensation? One would have thought he has gone back on what he was implying at that time.
  (Ms Quin) It is true that in farming there are disease risks, and that is something that all farmers, in whatever part of the industry, are well aware of, whether it is animal disease or plant disease. However, during the course of the immediate aftermath of the outbreak of swine fever, and the measures that were taken to deal with it, it became clear that there certainly was a welfare problem in those establishments which were subject to restrictions but were not themselves infected premises. As a result of that welfare problem, the overcrowding caused by the fattening of the pigs, this was a possible area which Government could help to address. Discussions with the industry eventually reached an agreement, which again, as you know, was modified subsequently on a number of occasions following suggestions from the industry to make it a better scheme from the pig producers' point of view.


 
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