Select Committee on Agriculture Minutes of Evidence


Examination of Witnesses (Questions 500 - 519)

WEDNESDAY 2 MAY 2001

MR PETER BARR, MR GWYN HOWELLS AND MR BOB BANSBACK

Chairman

  500. Would you like to speculate on what prices will be like in September or October?
  (Mr Bansback) It is very difficult to speculate on prices because we do not know precisely what the situation is going to be. But obviously, even with—

  501. What would be the worst scenario?
  (Mr Bansback) The worst scenario would actually be for a further seasonal drop from where we are at the moment of 10 to 20 per cent in the price, and that would be lower than we have experienced. Of course there is a lot of uncertainty about the supplies coming on to the market, because we have had a reduction in the breeding flock, a much lower lambing rate, so it is difficult to assess that, but we would certainly expect prices to be very weak during the autumn and winter until we are able to export again. And that conveys the importance of exports to the sheep industry.

Mr Drew

  502. If I could ask you to do a bit of star gazing. I talked to one of my farmers yesterday who said that he simply cannot get a slaughterhouse to take his animals. He says that pricing is just so poor at the moment. Is that something you are finding across the country? Or is he just unlucky?
  (Mr Bansback) What are we talking about here? Sheep?

  503. I think it is both sheep and cattle. It may be that he is in an unfortunate position. I did not take the phone call directly. Is that something that is happening at all nationally?—that slaughterhouses are just saying, "The price does not make it worth our while to slaughter at the moment."
  (Mr Bansback) There has been obviously a lot of disruption. That has been true. I am slightly surprised to hear, if that were the case on the cattle side. I think on the sheep side there is a lot of concern in terms of marketing, because remember that the channels of distribution have been quite severely affected and it may well be that, with volumes of imports having been increased in one or two respects and therefore a lack of availability for domestic production in particular areas, there may not be a demand. It would be quite nice to follow this up with you afterwards, if you could let me know where it is.

  Mr Drew: Yes. I think it may be just the complication of so many different schemes out there at the moment. I think to be fair, we will need some clarification of exactly who is sending what animals to where and how they are being paid for and so on.

Chairman

  504. I have had the opposite experience, of constituents saying the welfare scheme is draining animals away from the human food chain and that they cannot compete with the welfare scheme prices, which have now changed.
  (Mr Bansback) Yes. With the lower threshold of prices in that, I do not think you will find that that will be the case any more.

Mr Drew

  505. If I may look at perhaps the longer-term future now. I will not declare an interest as a vegetarian, although we always seem to quote the Vegetarian Society for what they think is happening to consumer demand. I think we have had enough dealings to know that I do not proselytise the vegetarian option. I am just interested to know where you see things going. This is another serious blip in terms of potentially consumer confidence in red meat. Are we looking at something that is going to be much more difficult to recover from this time?—given that you did recover from BSE.
  (Mr Barr) I would not like to underestimate the job. I think it is going to be a difficult task. I think we are capable of achieving it but I think it is going to be difficult. This is an opportunity to do it properly. The first thing we must do is kick start it, and that is why we are asking for money, because money spent now will actually ... It is the speed with which you change the situation. It will be much, much easier to change short term rather than to leave it a year, a year and a half. Equally, if we do prime start it now, we at least have the benefit that levies will take you forward, as opposed to drifting a year and it could cost us double. To my mind, there is a great merit in kicking it hard. One could easily have come up with the £18 million and something, but this is genuinely what we believe it will take. And I would not underestimate the task: it will be difficult, you are absolutely right. We have set ourselves very specific targets. From probably an outside position, but talking to quite a few farmers prior to this crisis, one actually had the impression, with things like beef, that the market was maybe on the cusp and supply and demand were coming on balance. Effectively it only needed a slightly greater increase in sales to produce quite a reasonable increase in prices, is an observation—and of course all the profit is made on the top—but I very much got the feeling that we were there. Why I am so interested in this demand chain is that as well as farm assurance I think you have to introduce things like HACCP (which is hazard analysis) in the chain, which is not really used in farming—which is of course you run up and down the chain saying, "What is likely to go wrong?" rather than assessing that which is right. Although it is not actually in the submission, it is certainly a bee in my bonnet that you have to look at the potential hazards. I would propose that we build into both farm assurance and into all of our thinking, a constant hazard analysis, so that we can identify where is the next problem going to be.

  506. It could be very busy.
  (Mr Barr) I think it becomes a discipline. It is quite amazing, you know, if your people are actually trained. Before leaving my last employers I designed a number of factories and you designed into them diagnostic appraisal all of the time, so that the computers were constantly looking for that which would go wrong next. It is quite amazing because you had 30 minutes' knowledge of a breakdown, and that meant that you could prevent it. But that has really just come from hazard analysis. It used to be done manually. And once you have developed the chain—it is surprising—you can do it frequently and quickly. But that would take you literally from birth and feeding to the consumer.

  507. How do you factor in the fact that we could probably have no export market for a year or so? I do not know if Gwyn wants to say something about that. Clearly, as you have said, with sheep the reason we have had such a buoyant supply chain is because we are a major exporter, and yet we were effectively shut off, to be realistic, for maybe a year.
  (Mr Barr) I will let Gwyn answer that question, but it is certainly one of our priorities and, although it may not happen immediately, we have to start that process.
  (Mr Howells) Can I go back to an earlier point you made, which is this is another issue for the meat industry to handle. As you know we are great believers in consumer research and we have actually undertaken a lot of consumer research since the onset of the disease. Effectively, even the most robust consumers of meat are beginning to say, "This is another issue," and we have to take that very seriously. A part of the recovery programme is not only restoring normality today but actually preparing consumers and the industry for changes that must come as a result of these challenges. So the industry must not only get its act together but it must be seen to be having its act together, and that is what we are talking about in a reassurance programme or assurance across the board as a way of addressing that issue. There will be effectively different strategies for different species, and you are absolutely right in saying that the sheep issue, because a third of the volume was previously exported, is going to be a challenge for us. In that challenge I think there are also opportunities. There are opportunities to extend the lamb sales into the catering outlets in the food service. The Ministry of Defence, for example, is a target for us. If the price which has been a hindrance in the past is now an opportunity, then obviously we will be looking for different markets to develop.
  (Mr Bansback) It is partly a market issue, it is partly to look at the market support measures that are available during the period of total disruption, and there are mechanisms there. The point about the two-tier sheep markets, which will continue until such time as our exports come in, in our view needs to be taken account of from a policy point of view until that situation changes. Then there are mechanisms like private storage aids and so on which can be deployed tactically to help the market as well. I think this needs to be going in conjunction with the market recovery schemes.

  508. Could I ask one last question—it is the favourite one from the previous session we had. What is the consumer view on vaccinating meat? Has the consumer got a view on vaccinating meat?
  (Mr Barr) Again, I will let Gwyn amplify on this if necessary, but the research at the moment would suggest—and this is both from our research and from the IGD's research—that probably about 60 per cent of the consumers either strongly or to a degree would prefer to have non-vaccinated meat.

  509. Sixty per cent?
  (Mr Barr) Yes—around that figure. It varies slightly from degree to degree.

  510. And that is definitive. So some of the stuff that has been coming out saying, "The consumer is more than happy. Vaccination does not make a blind bit of difference to their attitudes—"
  (Mr Howells) Could I just say that it is actually a very simplistic thing to say that consumers will or will not. Our research would show that actually consumers are breaking down to three types as a result of foot and mouth disease, defined very simply as people who are robust consumers of meat, who are going to stick with it regardless—although even those people still have question marks and this is another part of the saga. The other two types are people who have health concerns and people who have moral concerns about the way the cull has been exercised or to do with animals, largely driven by the media images that they are seeing on television. It is wrong to say the "average consumer" because it is actually a mish-mash of consumers. Those in the second two groups that I have talked about are actually much more likely to be lapsed or wavering in their meat consumption in the first place. Those in the first group are committed to meat, even though they still have question marks about the future.

  511. Can you give us any figures?
  (Mr Howells) No, the figure—

  512. You are saying 60 per cent. Where do you get the figure of 60 per cent?
  (Mr Howells) Well, it varies. Our research and the IGD research are within a couple of points of each other, and they are both about that 60 per cent figure, so that is two I can quote specifically to give about that 60 per cent figure.

Chairman

  513. Mr Barr, you said something very interesting about HACCP and detecting problems before they arose. It sounded to me as though you were proposing a sort of corporate consultancy service for the food industry. Technically your mandate is the marketing and promotion of product, but you seem to be suggesting a role which is actually quite interesting, in a sense almost acting as standards authority for the way food is produced. Are you going to produce an off-the-shelf hazard control system or mechanism? Could you see a role for the MLC in actually going back into the plants and looking at the way product is made and suggesting the introduction of these sort of safeguards?
  (Mr Barr) Well, you are quicker on your feet than I am because you have actually taken it further. Really what I feel is that the rest of the food industry has been using hazard analysis for a long time and I do believe that part of improving the competitiveness in the industry and the effectiveness of the industry is to identify the hazards, because then you put your maximum input to the most dangerous point. It does give you a clear idea of the supply chain but I do believe it should be incorporated as part of farm assurance. We have somehow got to help the farmer to survive in a market economy—because that is where we will go, is a market economy—and we have to do that in a way that reduces rather than increases his costs. If we look at things like IT within the greater food chain, it has taken paper out and cost out—I mean, it has not added to the cost. One of the things I have noticed, coming into farming, is the amount of paper about.

Dr Turner

  514. Could I ask some questions about the section in your memorandum about your role during the crisis, particularly your role in providing information. You point to a very large number of hits on your web site and 11,000 calls to your telephone help line. Who are the people who are actually contacting you? Is it different on the help line than on the web site?
  (Mr Howells) We do not have the information as far as the web site is concerned, but as far as the help line is concerned it largely has come as a result of announcements that are made on movement licences, for example, on Friday or particular Fridays during the crisis, and we were very active on the Saturdays and Sundays, answering calls for farmers looking for specific interpretation of the regulation in so far as it concerned them. As time has progressed actually the help line has been used more and more by different types of people. Even consumers have been telephoning the help line, because the number has been published on Ceefax and Teletext, seeking opinions, giving opinions and seeking help. To quote a silly example, a glider pilot telephoned us to see if it was safe to fly over Buckinghamshire.

Mr Drew

  515. And was it?
  (Mr Howells) It is not an infected area! But a wide range and largely linked to the licence movement schemes and welfare disposal scheme, etc.
  (Mr Barr) I experienced this personally on Monday night: I was with a friend, a farmer, who had a problem—and I could not answer it—on movement. He said, "I was going to phone the MLC anyway," so he actually, while I was there, phoned the help line. They did not give him the answer he wanted—in terms of, you know, his movement was restricted, but he understood—and, on the few questions he had, they said they would call him back. Nobody knew I was there, but they said they would call him back with all the answers in five or 10 minutes, and they did. The relief and pressure that took off the man made me feel it was all worthwhile. I made sure the help line people knew. It was not a staged thing, it was something where I was there when he was doing it, and I was actually very encouraged by the speed and effectiveness of the help line.

Dr Turner

  516. Presumably this takes organising in terms of making sure the information is available. Do you have any mechanisms for checking out how successful you are in providing the help that is wanted? We have had a single example. Presumably something more systematic would be required to judge effectiveness. What is in place to do that?
  (Mr Howells) We have not set up a system. Frankly, we have been too busy taking the telephone calls and literally logging them to take names and addresses and to follow up, because the pressure has been so great. So we do not actually have a mechanism other than the word of thanks or, you know, the comment from the telephone.

  517. And the feel of the operators, I suppose.
  (Mr Howells) Yes.

  518. As to what they have—
  (Mr Howells) Contributed, yes.

  519. Are you recording any of that? What the operators have to say as to what has happened in the day?
  (Mr Howells) Absolutely, yes. From our point of view, that is a big success for the organisation and something that we will be filtering back to staff, these sort of anecdotes and views. We have had comments from farmers particularly, saying that they have been surprised very pleasantly by the response they have had from the Meat and Livestock Commission to this service.


 
previous page contents next page

House of Commons home page Parliament home page House of Lords home page search page enquiries index

© Parliamentary copyright 2001
Prepared 18 June 2001