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Lord Phillips of Sudbury: My Lords, I should like to clarify the statement that the noble Viscount, Lord Cranborne, has made about today's press release. Can he tell us whether that was for the payment of £50 a pig which was promised or anything beyond that?

Viscount Cranborne: My Lords, I am sure that the noble Lord who answers the debate will confirm this. I have only heard verbal reports. I have not seen a press release. I am told that there was never much problem about the payment of £50; it was the up-to £25 as a result of the reduced levy that was not paid. Perhaps as a result of this debate--because one likes to flatter oneself if one can--the Government will be shamed into doing something about it.

7.56 p.m.

Lord Phillips of Sudbury: My Lords, no doubt the Captain of the Gentlemen-at-Arms will tell us about that when he sums up. If it be the case that the top-up figure over £50 is now being met by the Government and not by the industry itself that would be a major advance.

I should like to thank the noble Viscount, Lord Cranborne, for putting down this Question. It is an important debate, even though the crisis of the classical swine fever outbreak is, thank goodness, under control.

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The fever broke out last August on the farm of BQP Ltd at Iken, an ancient village on a coastal headland in Suffolk. BQP Ltd is now owned by Dalehead Foods, of which I was a non-executive director for over a dozen years until 18 months ago. They are now the biggest producers of pigs in the country, to add to their pre-eminence as abattoir operators, pork butchers and packers.

The tragic crisis of foot and mouth disease has overshadowed the consequences of classical swine fever. This Question requires us to concentrate on that fever and the plight of East Anglian pig producers. I suggest that we and the Government should also have a care for those whose businesses are intimately and irrevocably connected with pig production, such as the abattoirs. Currently, they are losing massive sums of money, with their fixed overheads, and with no apparent prospect of compensation or assistance.

We should also concentrate on how to prevent a further outbreak of swine fever, given its devastating effects. The MAFF State Veterinary Service and the Veterinary Laboratories Agency published their preliminary findings after an exhaustive inquiry into the outbreak--which, incidentally, was traced back to a pig producer in Norfolk--in the Veterinary Record of 9th September 2000. They did not find any definite source of the outbreak. They mentioned six hypotheses as to the sourcing of the infection--consumption of infected pig product, exposure to infected pigs, exposure to classical swine fever virus by contaminated vehicles or personnel, exposure to aerosol virus from discharges from effluent, exposure to CSF virus in contaminated biological products and, finally, exposure to the virus in contaminated semen.The idea that the infection might have come from a half-eaten ham sandwich tossed by a passer-by into a pig paddock in Norfolk, to be consumed by a pig which then developed the fever is almost Alice in Wonderland. Yet that is what the vets and the laboratories thought was indeed the most likely source of the infection. I checked yesterday with the government veterinary service, and that is still as far as they have managed to go in that respect. If that is the scenario, it makes the prevention of future outbreaks impossible.

Yet the fact is that the outbreak was here in England, even though the infected meat may conceivably have come from abroad. I am not as certain as the noble Viscount, Lord Cranborne, that it is at all safe to assume that the infected meat in this case was from abroad. Indeed, that is not the impression that I get from the official report. It also appears to be the case that other countries, such as the USA and Australia, control outbreaks more effectively, and have stricter controls. Perhaps we can learn something from them.

The pig compensation scheme that went through this House very recently appears to be working well, even if it is bringing financial relief too slowly. If the Minister can confirm in his response to the debate that the Government are now paying the top-up over the £50 rather than the industry finding that through its

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own resources by levy, that will be a major change. However, if that is not the case, it will be interesting to know why there should be a discrepancy between the compensation arrangements for foot and mouth and those that apply in this respect. As we all know, there is no industry provision for foot and mouth compensation; it all comes from state sources.

Like other noble Lords, I should be interested to hear from the Minister why the fiercer legal disciplines that restrain pig movements for 21 days, other than movement for slaughter, should not now be contemplated for sheep and cows. I appreciate that that is not strictly germane to this issue, but different regimes apply. As I understand it, in the case of foot and mouth, some of the infected sheep travelled to seven markets in 14 days, spreading mayhem as they went.

Another matter for consideration is the sale of pigs at live markets, which currently accounts for only 3 per cent to 4 per cent of the total sales in East Anglia. As I understand it, the national quality standards cannot be met where the pigs have been traded in that way. Surely special attention needs to be given to ascertain whether or not the risks of infection are significantly greater for those animals, and, if so, how that can be addressed without making life more difficult than it already is for the small producers and dealers whom I want to see helped rather than squeezed out yet further. It would also be interesting to compare the robustness of health of small batch pig production with large batch production.

The issue then arises as to how to minimise the appalling waste when fever breaks out. Although now mercifully under complete control, the 180,000 to 190,000 pigs slaughtered in the recent outbreak were all rendered, and put to waste. Given that the meat of such animals is perfectly fit for human consumption provided that the pigs concerned have been through the necessary heat treatment, ought we not now to be building that capacity so that, when the occasion next occurs, the devastation will not be total because the meat of the slaughtered pigs can at least be safely used for human consumption? I realise, of course, that there are difficult issues involved about anticipating that outcome in terms of providing the necessary facilities that are presently absent.

I now turn to the problem of breeding sows, 90 per cent of which, when culled, normally go for export--mostly to Germany. With the export ban, they are now unsaleable, as indeed are a high proportion of pig shoulders, which represent nearly a third of the pig, and over a quarter of which tend to find their way abroad. Can the Minister say whether the Government have any thoughts as to how to assist the industry in coping with those thorny problems? After all, the export market is now a critical component of the viability of the British and East Anglian pig industry. No one has yet mentioned the support fund of over half a million pounds, which, I believe, is languishing unused after the last outbreak of Aujezky's disease 15 to 20 years ago. Might that sum now be used to help the cash flow problems of producers, even on an interest-free loan basis?

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Finally, I believe that the industry and the Government need to look more closely at ways of meeting the next outbreak of swine fever, because on the ham sandwich hypothesis it would be foolhardy to think that it will not come. Would it not be better to build up an industry fund during the good years, rather than wait until the disaster has struck? Again, I make that comment subject to what may be said by the Minister in his response. An industry levy could be set at a modest level, which would, none the less, build up over the years to a significant amount that could quickly take at least some of the strain. That would demonstrate a statesmanlike approach by the industry in terms of self-help. It would also encourage maximum government financial assistance to ensure that full and timely compensation is available next time round. I look forward to hearing the Minister's response to those points.

8.5 p.m.

Baroness Scott of Needham Market: My Lords, I am grateful to the noble Viscount, Lord Cranborne, for initiating this debate, and to my noble friend and Suffolk neighbour Lord Phillips of Sudbury. I am looking forward to hearing the comments of the noble Baroness, Lady Byford, who also farms in Suffolk. It is rather on account of that East-Anglian connection that I speak in the debate this evening.

I make no claims to be an expert on the pig industry. However, my home county of Suffolk was at the heart of the outbreak last year, so I have taken a particular interest in its effects on our local economy. As a county councillor in Suffolk, I have a further interest in the sense that the county council is one of the leading agencies in managing the effects of such an outbreak. Indeed, the noble Baroness, Lady Hayman, was quoted in the local press as holding Suffolk up as an exemplar of co-ordinated working. I am afraid to say, however, that the liaison did not seem to work both ways. It took MAFF four days to inform the county council of the first outbreak by which time we had heard about it through local radio programmes. Given the role of the county council as regards trading standards in animal welfare, rights of way issues, and so on, that was a far from satisfactory state of affairs.

As we heard, during the outbreak over a quarter of a million pigs were slaughtered, and many businesses jeopardised as a result. My noble friend Lord Phillips referred to the fact that, in counties like Suffolk, an entire infrastructure is built around the rearing of pigs; for example, feed manufacturers, abattoirs, suppliers of equipment and vets all suffer for some time after the outbreak is controlled. As they suffer loss of viability, that can further affect the viability of other disease-free producers. As if that vicious circle were not enough, the pig industry in East Anglia was already under enormous pressure due to the high pound, the BSE tax, cheap imports and the lack of European aid for pig producers.

The generally accepted view that the outbreak was in all likelihood caused by discarded contaminated pigmeat shows how delicately balanced the viability of our livestock industry can be, with havoc wreaked by

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a single random event. But an apparently accidental occurrence should not simply be dismissed as bad luck. I agree with the noble Viscount, Lord Cranborne, that, as a matter of urgency, we should be considering tighter controls of imported pig meat, especially where the exporting country has a high incidence of CSF. There must be a more robust regime of penalties for the illegal importation of pig meat produce.

The fact that last year's outbreak and the other most recent outbreak in 1986 were caused by contaminated pork demonstrates that perhaps we should be working more closely with local authorities and other agencies to see how farms are located in relation to the footpath network, local landfill sites, and so on. There has now been time to look back at last year's outbreak of CSF in a dispassionate way. As we heard, the Agriculture Select Committee in another place severely criticised the Government for their lack of preparedness for such an outbreak. It believes that lessons should have been learned from the Dutch outbreak. I, too, should like to ask the Minister whether such lessons have been learned, or whether a future inquiry into the current foot and mouth epidemic will make exactly the same points.

The 2000 outbreak in East Anglia was initially difficult to bring under control largely because it occurred in areas of extensive pig production. Although such production is highly desirable in terms of animal welfare, it makes disease control more problematic. It is, therefore, more than a little disingenuous of the Government to have taken the position that such outbreaks should be regarded as a normal business risk. Where other generally desirable outcomes, such as greater public access and higher welfare standards, lead to increased risk of disease, and where the effect of that disease will result in measures that threaten the livelihood of the farmer, it is questionable whether that should be defined as normal business risk. The pig industry has little history of subsidy and has taken on itself the need to comply with higher welfare standards which our consumers demand but often do not want to pay for. But even in an industry with a tradition of independence there is only so much that it can take.

After a good deal of anguish on the part of pig farmers, the Government eventually came up with an acceptable deal under the welfare disposal arrangements in November last. I wonder whether the Minister can outline for us the level of payments due to be made during the current crisis. Anything less than full market value will add further pressure to an industry already on the edge. With restrictions on movements and the ban on exports I hope that the EU exceptional market support measures will also be used to operate a "purchase for destruction" scheme.

It became clear recently that money earmarked for the pig industry development scheme earlier in the year was diverted to welfare payments when the outbreak occurred last year. Is there any prospect of that money being redirected back into the development scheme? Can any surety be offered that the money will not be further redirected, this time towards the victims of the foot and mouth outbreak? I also hope that the

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Government are prepared to take on board the criticisms of the Select Committee of another place that the industry restructuring scheme involved processes which were far more lengthy than necessary.

On a similar point, can we perhaps consider an emergency payments regime to assist farmers at this difficult time because normal living expenses do not stop while MAFF does the paperwork? On a more positive note, I should like to think that we can do a great deal more to promote the fact that British pork is produced to a higher quality and with better welfare standards than in many importing countries. There is a clear need for better marketing strategies to make those benefits clear and a regime for better labelling to assist consumers in making those choices. The growth in popularity of farmers' markets demonstrates the benefits of providing goods which have the confidence of the purchaser. In Suffolk we have supported the "Tastes of Anglia" consortium which promotes the high quality Suffolk ham and pork produce.

Suffolk is still at the moment mercifully free from foot and mouth disease. However, in a strange way last year's outbreak was a forerunner and, of course, many of the issues raised are exactly the same. Recent debates have highlighted for us all the price versus quality issues which go to the heart of concern over classical swine fever, BSE, foot and mouth disease and bovine TB. Perhaps it is time to have a proper independent oversight and research into the issues of animal husbandry, perhaps through the Food Standards Agency if it is given adequate resources.

There seems to be a growing consensus that there must be major changes in the way our rural economy works, but this needs to be judged on a rational basis, some distance in time from the heat of the crisis, and in a rounded way which does not seek to treat agriculture separately from the rural economy and the wider issues of public health and confidence.

For East Anglian pig farmers, suffering the second crisis in seven months, the future is not looking good. I hope that perhaps the Minister will be able to offer some crumbs of comfort to this important part of the East Anglian economy.

8.13 p.m.

Baroness Byford: My Lords, I begin by thanking my noble friend Lord Cranborne for bringing forward this important matter this evening. Indeed, in his introduction he used strong words and was critical of the Government's handling not only of the swine fever outbreak but also of the current foot and mouth outbreak. His speech reflected inadequacy on the part of MAFF and muddle, which the noble Baroness, Lady Scott, also mentioned.

I should declare an interest. My husband has a family farm at Acton just outside Lavenham, where, in addition to growing arable crops, we run 120 breeding sows. I know from first hand the problems that have afflicted the pig industry both as regards its cyclical nature and most recently as regards the outbreak of classical swine fever. We were one of the fortunate

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ones in that our farm lay only two miles outside the restricted area. We avoided having an infected herd and also falling within the restricted zone.

My noble friend was right to raise this issue. The swine fever outbreak began on 8th August last year and is estimated to have cost the industry some £20 million. Bank borrowings are rising every day. Around 1,200 producers were trapped by movement restrictions in Norfolk, Suffolk and Essex and lost almost £4 million, which also resulted in rising bank borrowings. On 29th August last year the Government introduced the Pig Welfare Disposal Scheme to deal with the potential welfare problems in recognition of the exceptional circumstances affecting our pig producers because of movement restrictions which were necessary to eradicate the outbreak. I understand that by the end of October 134,000 pigs had been offered for the scheme and claims worth some £4.1 million had been submitted. Was that money paid to farmers in full and, if so, by what date were those payments made?

The figures gained from MAFF officials this year show that some 70,000 diseased pigs were culled and a further 190,000--however, I accept the figure of 200,000 that others have mentioned--were culled under the animal welfare disposal scheme. Have these farmers been paid? As others have said, the crisis has seen some 25,000 jobs lost in the pig industry, with job losses likely to rise to 50,000 in the industry as a whole.

Farmers in restricted zones were beginning to experience animal welfare problems. Pigs needed to be fed and as each week went by they had to be retained on the farms in increasingly cramped, overstocked conditions. The Government came forward with financial aid. Originally they offered a mere £35 for pigs weighing over 60 kilos and £10 for smaller pigs. At that stage the industry considered those payments unacceptable. But after lobbying from the pig industry, ourselves and other parties, an increased offer was made of £50 from the Government and a further £15 in the form of a levy from the pig farmers themselves.

The sixth report of the House of Commons Agriculture Select Committee, to which my noble friend referred, states:


    "There is a lot of frustration within the pig industry at the lack of tangible results from the Government's announcements of last year. Much had been promised, and welcomed, but comparatively little been delivered ... We expect the Minister to ensure that all the money originally allocated to the pig industry is paid out in good time".

Other noble Lords have already mentioned the lengthy and unsatisfactory way in which this matter has been handled. A pig farmer in Suffolk telephoned me about three weeks ago. He said that he was owed some £27,500 and he was still waiting. Presumably he is paying interest on his bank loans. When the Government give him the initial sum of £27,500, will they also pay him interest to cover the loan that he is due to repay the bank?

On 4th September last year my honourable friend James Paice wrote to the Minister and pointed out that the £66 million scheme announced by the Government

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at the end of March had still not been put in place and that farmers had not received a penny of the producer levy. And here we are six months later. I hope that the Chief Whip will have the relevant figures when he replies to the debate. We need to know what has been paid out and what is still outstanding.

What progress has been made in identifying the cause of the original infection? That matter has been raised in this House and the other place on many occasions. My noble friends have referred to the ham sandwich theory. Others have suggested that the cause of the outbreak may be due to illegal imports of meat. Others have suggested that it may have been caused by animals that were illegally imported through airports. Some have mentioned pig swill in that regard. But whatever the cause, all of us in this House consider that we need much stronger and stricter formal structures at the port of entry and controls over foreign meats entering our country.

In the past two years some 37,000 tonnes of pig meat have been imported from countries where foot and mouth disease is either in existence or is endemic. The noble Lord will know that our party has consistently asked the Government for closer inspection of imported meat. We have also called for a tightening up of the food labelling system to ensure that meat imported into this country but processed here should not be allowed to be classed as British. I referred to that two years ago when we were taking the Food Standards Agency Bill through the House and cited the pig industry on many occasions. Pig producers were furious that meat coming into our country was being presented as British when it was imported meat but processed here and therefore labelled "British". That is a disgrace.

No sooner had we recovered from the immediate restrictions on swine fever and begun to breathe a sigh of relief than foot and mouth disease hit our country. Again a foreign disease is entering our herds. Although the infection was first discovered in pigs, the spread has been dominated by sheep and cattle. This is another disaster to strike our farmers, who are having to cope with their lowest income for 50 years--an average of just over £5,000 last year. Urgent action is needed.

Since 23rd February slaughter movement from farms not under specific restrictions has been running at 70 to 80 per cent of normal capacity. A steady accumulation of overweight pigs is backing up on farms. I was recently speaking to a big abattoir and processing firm in West Bromwich which, because of the foot and mouth disease restrictions being imposed on it, did not have the ability to take more through the system in a quicker way.

The long distance movement scheme for pigs, from breeding to rearing to finishing, has not yet started. Perhaps the noble Lord will respond to that. I understand that the scheme involves a time-consuming, complicated system of cleaning and disinfecting lorries which will have to be streamlined.

Farms under restriction have not sold a thing since 23rd February this year. Estimated figures of pigs in infected areas are provided by Assured British Pigs,

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which embraces about 80 per cent of all pigs. Inflating its figure of 15th March by some 20 per cent yields 55,000 sows and 600,000 growing pigs. As other noble Lords have said, their old sow market has fallen. We normally sell approximately 6,000 per week, of which 90 per cent go for export; that market is closed.

The urgent problem must be solved if our UK herd is not to lose long-term productivity. It is also critical for our breeding companies--our genetic future--to be able to start trading again at least in the UK market. We are really living in very troubled times.

I am left worrying about our farmers. I understand that the Government have this afternoon announced a scheme for our pig farmers. I should be grateful for clarification. My understanding is that it is a foot and mouth welfare scheme, as opposed to a swine fever scheme; the noble Lord is nodding. Therefore--I stand to be corrected--I think we need to talk about two different schemes.

I understand that the offer provided by that scheme is £75 for culled sows and £15 plus 55p per kilo for all other pigs, to a maximum of £70. I also understand that the Government themselves have not undertaken to finance that top-up scheme but that it takes the form of a loan. Perhaps the noble Lord will also clarify that point. The Government's response will indeed be welcome, but many will find that, although a loan will help, they will have to eat into their capital. They were hoping for much more government support.

We have previously suggested that, in these very difficult circumstances in which we find ourselves, there may be a role for the reopening of smaller abattoirs to cope with the back-up problem of animal welfare, where we cannot move enough of our pigs that are in restricted areas at the moment. I should be grateful if the noble Lord would also deal with that matter.

Classical swine fever came from abroad; so has foot and mouth disease. Our British farmers care for their animals. They have set the highest standards. We have some of the finest herds, of which we are all rightly proud. Our farmers care for and take great pride in their stock. The swine fever outbreak, and now the foot and mouth disease outbreak, are destroying not only the animals but those whose lifetime's work is being culled before their eyes.

We look forward to the Minister's response, and I again thank my noble friend for introducing this very important debate today.

8.25 p.m.

Lord Carter: My Lords, in replying to this extremely interesting debate, I declare a former interest. The farming company of which I was a director and shareholder before I entered government had a very substantial pig unit in Hampshire and Wiltshire, not in East Anglia. I hasten to add that my shares are in a UK-based trust and that I have resigned all my directorships.

From my lifetime's working experience in farming, I am well aware of the problems that face the industry. In the time available, I am not sure that I shall be able

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to answer all the questions that have been asked, but, as always, I shall ensure that every noble Lord who has spoken receives an answer from me, either in the debate or in writing.

I think I am grateful to the noble Viscount, Lord Cranborne, for raising this issue today, and to the other noble Lords who have spoken in this short but useful debate. As the noble Viscount, in his charming way, said, he had occasion to be disobliging. This has been an important debate. At this time of crisis in the livestock industry, we should not forget that, as has been made clear, the pig producers of East Anglia have previously been here, and not all that long ago.

The classical swine fever outbreak in East Anglia between August and December 2000 may not have had the media impact of the foot and mouth disease crisis; nor did it affect as many farmers, animals or members of the general public. But for those caught up in the outbreak, either directly or as a result of their pigs being subject to movement controls, the shock was just as great, and the consequences equally daunting.

In the course of my speech I shall give a brief summary of the outbreak. I shall set out what the Government did in response to the consequences of the outbreak and what it was asked to do but, for various reasons, could not do. In doing so, I hope to address almost all the points raised, including the foot and mouth disease outbreak, though this debate is about classical swine fever.

The outbreak started on 8th August with a confirmed case of classical swine fever on a holding in Suffolk. Investigations suggested that the original infection was introduced in early June to a breeding unit in Norfolk, which then appears to have spread to pig rearing premises with the movement of infected, weaned pigs. The lateral spread appears to have taken place from one of those to two neighbouring holdings. Others were infected by either the movement of infected pigs or the movement of vehicles or people.

CSF was confirmed on a total of 16 premises during the outbreak: one in Essex, six in Suffolk and nine in Norfolk. Nearly 80,000 pigs, classified as infected or dangerous contacts, were slaughtered. Controls were finally lifted on 29th December 2000. I think it is well known to noble Lords that the Government pay compensation to producers whose herds have contracted CSF or are thought to be dangerous contacts and must be killed. Under Schedule 3 of the Animal Health Act 1981, producers of animals with swine fever are recompensed at 50 per cent of their value preceding infection, and at full market value for healthy animals.

The compensation attempts to address the immediate financial difficulties faced by those who have the disease on their holdings. What it does not do is address the consequential losses of those farmers and the problems faced by farmers who have not had the disease on their holdings but are unable to market their animals because of movement controls. I shall return to that point when I deal with the Pig Welfare Disposal Scheme (PWDS).

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I should point out that the consequential loss for those farmers who have had their animals slaughtered is an insurable risk. One farmer I know well has substantial consequential loss cover of £300,000 in the event that his animals have to be slaughtered as a result of an outbreak of disease.


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