Memorandum submitted by the Meat and Livestock
Commission (M 13)
1. The United Kingdom pig industry has,
for the most part, emerged from the deepest crisis to effect pig
producers in living memory. During the course of 2000 pig prices
have improved allowing pig producers to make modest profits and
pay off debts accumulated over the previous two years. The industry
has promoted its product strongly under the Quality Standard mark
and maintained a price premium against other European suppliers.
However, the UK industry remains under competitive pressure from
the high value of sterling in relation to the Euro and related
currencies and the continuing costs of investment in high welfare
standards and BSE related control measures.
2. The outbreak of Classical Swine Fever
(CSF) in East Anglia in 2000 has placed a considerable strain
on the whole industry and particularly the pig producers affected
by the disease and related movement controls. Those producers
within the Surveillance Zones have been unable to market their
pigs and have had no cash flow into their businesses for several
months. These producers have incurred increased costs in an effort
to control the spread of the disease. The Welfare Disposal Scheme
and the payments associated with it took time to evolve into the
current position of a payment from government with a proposed
top up from the industry.
3. MLC and the British Pig Executive (BPEX)
has worked closely with producer organisations, such as NPA and
MAFF to design a scheme that would, in part, finance this top
up payment. A Development Scheme has been devised under Section
9 of the 1967 Agricultural Act, the statutory consultation on
which began on 24 November. The consultation is intended to be
completed by 23 January 2001. If the consultation goes smoothly,
MLC will then recommend to Ministers that the legislation should
be approved by Parliament, the Scottish Parliament and the National
Assembly for Wales.
4. MLC and BPEX will make every effort to
support the desire of producers to introduce this scheme and ensure
top up payments are made to affected producers as soon as legally
possible. However, affected producers are in more immediate need
of assistance if their livelihoods are to be protected. MLC and
BPEX therefore support moves by producer organisations to make
temporary use of funds in the Pig Disease Eradication Fund and
to approach government to provide an interest free loan that would
allow top up payments to be made once pig industry support had
been made clear.
5. MLC and BPEX welcome the proposed Pig
Industry Restructuring Scheme. Restructuring is an important element
of the BPEX strategy agreed with the pig industry in April 2000.
MLC has worked closely with the NPA and MAFF to encourage the
development of such a scheme. MLC and BPEX believe that the "Outgoers"
part of the scheme should be introduced as soon as possible and
will be making every effort to ensure that it is communicated
to producers. We will be concentrating on those producers that
have already left the industry as we believe that a further reduction
in actual production, as opposed to production capacity under
the scheme, is unnecessary. MLC and BPEX will support a wide ranging
and flexible approach to achieving the minimum capacity reduction
necessary to trigger the "Ongoers" part of the scheme.
The Ongoers part of the scheme should provide valuable and much
needed assistance to those producers committed to the future of
the UK pig industry.
6. The Government has committed a total
of £66 million to the Pig Industry Restructuring Scheme over
a three year period. This scheme must be implemented in a way
that allows all of this money to find its way to a hard pressed,
valuable and substantially unsupported sector of United Kingdom
agriculture so that it can be more competitive in the future.
4 December 2000