Select Committee on Agriculture Minutes of Evidence


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

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