Select Committee on Environment, Food and Rural Affairs Appendices to the Minutes of Evidence


Memorandum submitted by the British Meat Federation (A20)



  The intention of the Agenda 2000 programme is to amend the European agriculture regime with a view to assisting the EU and its Member States to compete in the global market, and to allow further enlargement of the EU to the East. To achieve this over the next five years without destroying the EU budget there has to be a reduction in existing financial support for agriculture.


  However, changes will impact in different ways on EU Member States and are likely to particularly disadvantage the UK livestock industry. Given the British landscape and climate, which is well suited to welfare friendly, extensive animal rearing, as compared with more intensive animal production of cattle in Spain and Germany; or pigs in Denmark and the Netherlands.

  This is an important issue since there is a public perception that Britain encourages "modern factory farming methods" when almost the opposite is true, and there is an actual need for larger, more cost effective farm units if the British meat industry is to compete in a wider market.

  In 2000 the UK was 74 per cent self sufficient in beef, 92 per cent in pork, 45 per cent in bacon, and 92 per cent in sheepmeat, but the impact of the recent FMD outbreak is to have further reduced the figures for beef, and also distorted those for pigmeat and sheepmeat due to loss of exports. Any reduction in subsidies that results in lower livestock production in the UK will further increase dependency on imported meat.


  Animal diseases in the UK over the last five years have seriously reduced the size of British livestock herds and flocks;

    —  BSE and the OTMS scheme affecting cattle numbers, and beef production;

    —  Scrapie potentially linked with BSE, leading to calls for scrapie resistant sheep;

    —  CSF hitting our pig sector just as it recovered from a severe downturn in the production cycle, discouraging restocking and further investment.

    —  PNDS/PWMS both currently reducing the availability of pigs to the market;

    —  FMD adversely affecting all three red meat species by reducing animal numbers.

  The effect of this reduction is to make the UK more dependent on meat imports, whereas the UK could and should be concentrating on increased production of cattle, sheep and pigs, and recovery of our lost export markets which were major earners for the UK until 1996.

The Effect of Subsidies

  Subsidies distort the market place, and a continuation of dependence on subsidies by livestock producers will make it ever more difficult to compete in what has become a worldwide market place for meat, especially pigmeat and beef. It seems particularly perverse to pay farmers not to produce food.

  On the other hand, all EU Governments have a need to preserve their rural communities, and farming plays a vital role in supporting the broader rural economy. It is only against this background that the current enthusiasm for diversification, and care for the countryside and its environment, can hope to make economic sense.

  Subsidies differ for each red meat sector:

    —  Cattle. The Slaughter premium will further increase in value, thus increasing the return to farmers and allowing the price of animals to fall to nearer global market levels. However, the 20 per cent of dry heifers permitted in the Beef Slaughter Premium Scheme (BSPS) discourages increased production;

    —  Sheep. The Ewe Premium is currently paid on ewes, whether or not they produce lambs, and we would clearly prefer to see support that encourages further production of good quality sheepmeat. Hill subsidies have had the effect of raising the value of hill farmland only suitable for sheep and thus artificially inflating the value of the sheep on the hills;

    —  Pigs. There are no subsidies for pig producers. The cycle of profitability and loss is shorter in the pig sector than for cattle or sheep, but until the CSF outbreak, pig producers were managing to survive on narrow margins without subsidy.

  If subsidies are to be removed, it is vital that there is balance and fair competition across the EU. British farmers must not be disadvantaged as they are now by a combination of factors ranging from competitive isolation as a result of animal diseases, through to flagrant flouting of EC legislation as practised by the French Government to discourage meat imports of both beef and sheepmeat.


  Despite subsidies, UK livestock farming incomes are currently at their lowest levels ever, and this will do nothing to encourage a younger generation into the industry at a time when the average age of farmers is 55 and rising. Low incomes are not matched by low expectations on the part of those in the industry, but morale is further reduced by the high cost of production in the UK, driven by high welfare, meat hygiene, traceability and labelling standards, and the cost of investment in a rapidly changing environment, which itself is driven by consumer lifestyle expectations.

  British meat production to these standards is achieved at a high cost in terms of both money and discouraging levels of bureaucracy, which necessarily lead to higher prices in the shops. However, retailers have the option of importing cheaper meat in order to compete with each other on price to the disadvantage of British farmers and meat plants.

  If British product is to compete successfully, producers must become more aware of the need to produce consistent high quality animals which have a repeat market. Red meat plants are the marketeers for beef, pork and lamb, but need close relationships with their producers so that the end product has a maximum value and as many costs as possible are removed from the supply chain.


  Encouragement by Government for farmers to diversify must not become an acceptance that farming can no longer be economically sustained, and an admittance that the UK will increasingly depend on imported food. This cannot be right. While there is a growing role for the tourism and leisure industries in the countryside, they can only be successful against the background of a stable and financially viable rural economy.


  In order to trade our way to profitability without subsidies, the UK needs to:

    —  develop alternative methods of encouraging increased production of extensively reared, consistently high quality animals for the retail, manufacturing, catering and export markets;

    —  ensure a better return for livestock producers by reducing costs in the supply chain, thus improving margins;

    —  to actively promote consumer awareness of British quality, welfare standards, and full traceability, thus encouraging the consumer to choose British meat;

    —  ensure better control of imported product, while safeguarding enhanced bio-security in the animal and meat chain;

    —  recover export markets by renegotiating the current beef Date Based Export Scheme, and pressing the EC to ensure that national measures to protect local markets are removed.


  If the EU will not or cannot continue to support livestock farming, and prevents Member States from doing so, then market forces must prevail as they currently do in the pig sector. In this event there will be no alternative to forming economically viable farming units other than to become increasingly dependent on imported food.

13 December 2001

previous page contents next page

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

© Parliamentary copyright 2002
Prepared 6 November 2002