AGRICULTURE SELECT COMMITTEE: IMPLEMENTATION
OF THE COMMITTEE'S RECOMMENDATIONS
Third and Fourth Reports
(1998-99 Session): The UK Pig Industry
1. The Government welcomed the Select Committee Report
as valuable contribution to the necessary debate on the future
of the British pig industry. While it did not agree with all the
comments and recommendations, its stated wish was to build a constructive
relationship with the Committee as both are striving to achieve
the same thing, an efficient and effective UK pig industry.
2. Progress has been made in a number of areas covered
in the Committee's Reports and comments on each individual conclusion
and recommendation are set out below. The Government fully recognises
the exceptionally difficult circumstances the pig industry went
through during 1998-99. While pig producers were used to dealing
with the cyclical nature of the pig market, this downturn had
been the longest and deepest in living memory. However, in March
2000 the average market price went above the accepted break even
point for the first time since June 1998.
3. Since the end of June this year the UK average
market price has remained relatively stable at around 101p/kg.
For the generality of producers, this would give a return over
total cost of about £5.00 per pig. This is a reasonable return,
but unless it continues at or above this level for a year or more,
it will not allow many producers to repay much of the debt they
incurred during the crisis. Furthermore producers in East Anglia
are still facing difficulties because of the outbreak of Classical
Swine Fever in early August.
Harmonisation of animal welfare standards
Recommendation a): The current disparity in legislation
on stalls and tethers between the UK and the EU is acceptable
only if the UK is leading the way to higher standards across the
Union. The Government should redouble its efforts to secure an
early and positive review of EC Directive 91/630. While retaining
the right to introduce national measures on animal welfare and
consumer standards, we feel that when such measures weaken the
competitive position of the UK industry MAFF should consider appropriate
and limited compensation for the essential change. We regret the
fact that the EU standards have been allowed to lag so far behind
the UK's and want to see any future changes in animal welfare
legislation imposed and implemented on a uniform basis throughout
4. The Government supported the Committee's view
that, wherever possible, future changes to farm animal welfare
legislation should apply on an EU wide basis. It is for this reason
that, while retaining the more stringent provisions in UK legislation,
we have continued to press for the completion of the long overdue
review of the EU Pig Welfare Directive. Following requests from
the European Commission, officials have provided information on
implementing higher welfare standards to the Commission. The Government
remains committed to the need to review the Directive and will
keep on making its view known. A Commission proposal to implement
the Directive should be issued shortly.
Producer costs and UK agricultural competitiveness
Recommendation b): While we recognise that farmers
in other countries often face particular burdens not encountered
by UK farmers, higher costs for UK pig producers confirm the Committee's
frequently expressed view that successive Governments have been
too quick to impose costs and burdens on UK agriculture without
adequate consideration of the impact on competitiveness. We repeat
our call to MAFF to be more aware of the financial implications
flowing from unilateral actions in the UK.
5. The Government recognises the importance of minimising
burdens on producers. That is why in September 1999 the Minister
of Agriculture, Fisheries and Food launched a review of red tape
affecting agriculture. Three industry-led working groups reported
in December 1999 on three priority areas identified by the industry:
IACS and Inspections, Intervention and Meat Hygiene and Slaughterhouse
Rules. Government accepted 98 of the 107 recommendations made.
In addition a number of other issues identified for review have
been considered in bilateral discussions between MAFF and industry.
Implementation of the recommendations is a priority under the
Strategy for Agriculture. Updated action plans showing progress
to date were published in July to contribute to the Industry Forum
and were published prior to the Forum's meeting on 23 November.
Simplification of regulations is also being pursued in Brussels.
Farm gate and retail prices for pigmeat
Recommendation c): The onus is upon the downstream
processors, manufacturers and retailers to ensure that their profit
margins are not at the producer's expense, thereby undermining
the long term viability of the UK industry. We remain unconvinced
that the majority of the industry after the farm gate - abattoirs,
processors, manufacturers and retailers - either understands this
or is ready to act on it. On the basis of the evidence provided
to us during this investigation it is difficult to make detailed
judgements about the specific concerns expressed to us by pig
farmers about retailers. However, the Office of Fair Trading is
currently investigating pricing practices of retailers and will
be reporting its findings soon. We eagerly await the OFT's findings
and, depending on the results of this study, may return in future
to the issue of retail margins made on pork and other fresh meats
and to the ability of supermarkets to dictate contractual arrangements
to their suppliers. We also consider that the retailers and manufacturers
should support government efforts to provide for higher standards
of animal welfare by not directing their purchases to cheaper
producers elsewhere and by insisting that European suppliers maintain
the same standards. It is also probable that some parts of the
UK supply chain are less efficient than their EU counterparts.
This too deserves further study.
6. The Minister of Agriculture, Fisheries and Food
expressed its view that the whole industry needed to recognise
its common interest and work together in the interests of the
consumer and the wider economy. To that end, the Minister set
up the Food Chain Group and asked it to review the opportunities
for joint working and increasing understanding amongst the players
in the food chain, including consumers. The Food Chain Group's
Report set out the challenges that all parts of the chain need
to address if UK agriculture and food businesses are to survive
and thrive. The Minister welcomed the Report, stating that the
Group rightly stress the need for action by both businesses and
Government, leading to results.
7. The Government followed this work up in May 2000
by launching Foresight - a National Debate on the Future of the
Food Chain. Over the next ten to 20 years the UK food chain will
face complex opportunities and challenges. Many issues will be
sensitive and there will not always be easy answers. For example,
pursuit of low prices should not be an excuse to undermine traditional
farming methods. But failure of the food chain to understand,
harness and above all communicate the issues and the choices they
imply for the future of the sector could affect the health of
the nation and our countryside, and lead to a loss of global competitiveness
and a reduction in GDP.
8. The Government recognises the existence of weaknesses
in the pigmeat supply chain. Three pig sector projects addressing
related issues were given grants under the Agriculture Development
Scheme 1999, including an industry-sponsored producer training
programme, and seven more have been approved under the Agriculture
Development Scheme 2000.
EU action to support the pig industry
Recommendation d): To help UK pig producers survive
the slump until pig numbers in the rest of Europe begin to fall,
the Government should encourage the European Commission to bring
forward further proposals on food aid, export restitutions and
aids for private storage.
9. The EU market has shown a marked recovery this
year. As the market has returned to profitability, the European
Commission has withdrawn or reduced most market support measures.
Recommendation e): The EU Agricultural Council
should make an early decision on its restructuring package without
breaching the principles of the current light regime.
10. The European Commission produced a proposal for
an amendment to the Council regulation on the common organisation
of the market in pigmeat, creating a Regulatory Fund for the pigmeat
sector. The government is not convinced that this Regulatory Fund
is the right way forward. Interfering in a relatively free market
poses problems and by apparently bringing quotas into the pigmeat
regime, the fund would run counter to the thrust of AGENDA 2000.
Introducing a fund may also work to delay the essential restructuring
which is necessary if the EU pig industry is to compete effectively
on the global market. To aid that restructuring, the Government
hopes to obtain clearance from the Commission for the introduction
of the Pig Industry Restructuring Scheme.
UK action to support the pig industry
Recommendation f): In the months ahead, the Ministry
must continue to encourage caterers and food manufacturers to
use more UK pigmeat and should aim to extract meaningful pledges
from these sectors on their procurement of UK pigmeat in the same
way it has from retailers. The Government should also amend the
procurement contracts of Ministries, Departments and other public
bodies to ensure that all pigmeat is sourced to welfare standards
no lower than the UK specification. MAFF must also urge all caterers
to provide the public with more details on the sourcing of pigmeat
used in restaurants, canteens and other catering outlets so that
consumers can make more informed decisions regarding the provenance
of the pork, bacon and ham they eat.
11. The Minister of Agriculture, Fisheries and Food
- held meetings with retailers and caterers to
encourage them to source to independently audited British standards;
- no powers to insist on a change to contracts,
but the Department has drawn the work of the MLC on procurement
contracts to the attention of interested parties. He has also
written to all MPs and public purchasing organisations such as
education authorities, hospitals and the prison service stressing
the high standards of British pigmeat;
- backed up a campaign run by the MLC to encourage
caterers to use pork-mark product and to indicate this on the
- extended the role of the verification officer
to cover caterers.
Monitoring of sourcing policies of retailers and
Recommendation g): The Government should monitor
all commitments made by the BRC's membership on welfare, sourcing,
origin and labelling of UK pigmeat in the near future. Such monitoring
should also apply to those branded manufacturers supplying retailers
with welfare friendly pigmeat products, as such arrangements as
currently exist appear to us to be self-regulatory.
12. The Minister of Agriculture, Fisheries and Food
appointed a "Verification Officer"; part of whose remit
is to work with industry bodies to identify cases where product
is being sold at retail or catering level which misleads the consumer
into believing it contains pork of British origin when in fact
it is imported. The Verification Officer's role also includes
checking progress on the commitment given some time ago by major
retailers that all their own label fresh pork and certain processed
products such as bacon would come from stall and tether and MBM
free production systems. A number of misleading labels have been
changed as a result of these efforts. The interpretation of the
Food Labelling Regulations 1996 in respect of origin marking has
also been tightened up. New guidelines have been issued to Trading
Standard Authorities and to the industry.
Welfare standards of branded pigmeat products
Recommendation h): We regret that discussions
between the BRC and the manufacturers of leading brands on welfare
procurement standards have not got underway before now, and that,
consequently, brands may not reach the same exemplary standards
as that of the BRC membership's own-label products. This is an
issue in which MAFF should be taking a keen interest.
13. A further element in the remit of the Verification
Officer is to check progress on extending the retailers' commitment
on sourcing and labelling to branded products.
Sourcing policies of retailers for pigmeat products
Recommendation i): We look to all retailers to
ensure that, as soon as possible, all bacon, pork, ham and processed
pigmeat products sold from their stores originate from livestock
systems matching or exceeding the current UK specification, and
to exhort manufacturers of the branded products they stock to
change their pigmeat procurement policies to support this aim.
14. See paragraphs 12 and 13 above.
Recommendation j): It is clear that more effective
marketing strategies must be developed to raise consumer awareness
of the quality of pigmeat products now available to the UK consumer,
but equally that any such strategy faces considerable difficulties in
terms of satisfying consumer requirements. We expect the MLC and
the leading supermarket chains to take the lead on this issue
and over the coming months to develop new and more effective means
of product differentiation. The Government should ensure that
labels accurately describe the food and the production method.
15. The Government has helped fund a £4.6 million
MLC welfare linked pork promotion campaign that aims to promote
the British Quality Standard Mark for pigmeat as a clear statement
about the higher standards that apply to products which display
Role Of the Meat and Livestock Commission
Recommendation k): We welcome the MLC's introduction
of a differentiation campaign for British pigmeat, and hope that
it substantially raises the profile of a domestic farmed product
of which we can be justifiably proud. Our view is that
British pigmeat has animal welfare
and traceability standards second to none. However, for many of
the country's ailing pig farmers, we regret that this action will
come too late in the day to be of benefit. We also consider the
MLC's £2.5 million campaign budget to be inadequate for a
promotion that should be laying foundations for the industry not
just for 1999 but for years to come and urge the Commission to
make more funds available. We recommend that the results of the
MLC's 1999 campaign for British pigmeat be subjected by MAFF to
an independent analysis of the quality and effectiveness of the
campaign, with the conclusions of such analysis made available
to all sections of the industry.
16. The Government's five-year policy review of the
MLC recommended that a regular independent analysis of MLC's promotional
effort should be fed into the Strategy Councils deliberations.
As a result, this has already happened for pigs and is being implemented
for beef and lamb.
Dedicated pigmeat promotional body
Recommendation j) While recognising the strength
of feeling behind the BPISG's demand, on balance we agree with
the NFU and, indeed, the Minister's implicit remarks that the
MLC should retain its responsibilities for pigmeat promotion,
at least in the short term. But the Commission will have much
to do to restore its credibility with the UK pig industry. Producers,
processors and, following the MLC's publication of its supermarket
study, retailers alike appear to have lost faith in its activities,
which for any representative trade group is profoundly worrying.
Despite the hostility of what appears to be a majority of the
industry, we have decided to give the MLC the benefit of the doubt.
But it is our hope that the structure of the industry will change
in the future. If this happens, then the industry's promotional
and administrative functions may well be better discharged by
another more specialised organisation. However, given the fragmented
nature of the industry at present, which compares most unfavourably
with its Danish competitors, we believe it is preferable to keep
the promotional activities for pork and pigmeat products with
the MLC. With this in mind, we believe MAFF should conduct and
subsequently publish a fundamental review of MLC's activities
as they relate to pigmeat early in 2001 to assess whether the
Pig Strategy Council is delivering industry objectives effectively.
17. The Government's five-year policy review of the
MLC agreed in general terms with the view of the Select Committee;
pigs should stay within the ambit of MLC and a thorough review
of the performance of the Pig Strategy Council (name now changed
to BPEX) should take place in 2001-2002.
MLC statutory levy
Recommendation m): We recommend that the MLC publish
an annual account of how the statutory levy from the UK pig industry
is spent and what precisely has been achieved for the UK industry
with this investment. This information should be subjected to
independent analysis commissioned and published by MAFF.
18. As was stated in the Government's original response
to the Third Report, the MLC's annual accounts, prepared in accordance
with standards set by the Accounting Standards Board, are published
as part of its annual report. This is laid before Parliament in
accordance with the Agriculture Act 1967. The accounts are audited
by reputable Chartered Accountants and subject to examination
by the National Audit Office. The Government did not consider
any further investigation or analysis in respect of the accounts
Pig offal market
Recommendation n): The development of new value
added markets for offals, which are unconnected with feedstuffs,
should be given greater priority. The MLC's cross- industry working
party has already made some advances in this area and we urge
the Ministry to look into developing this work further.
19. This is a matter for the industry (but see paragraph
Offal disposal charges and Mammalian Meat and
Bonemeal (MMBM) ban
Recommendation o): We believe that any relaxation
of the ban on MMBM, whatever the short-term advantages for UK
pig farmers, would reduce consumer confidence in UK pigmeat and
should therefore be opposed. At the same time, MAFF must work
with the European Commission and its partners in the Agriculture
Council to standardise the exclusion of MMBM from animal feedstuffs
across the EU.
20. At the request of the industry, the Government
put an industry paper to the Spongiform Encephalopathy Advisory
Committee (SEAC) asking whether it was possible to relax the feed
ban by allowing porcine MBM, produced in dedicated plants, to
be used in poultry feed. Following consideration at its June meeting,
SEAC advised that the feed ban should not be relaxed in the way
21. However, subsequent to the Government receiving
and accepting that advice, the European Union's Scientific Steering
Committee (SSC) issued a Report which did not include a proposal
to ban intra species recycling or feeding pig MBM to poultry.
In the light of this Report and recognising the importance of
this issue to pig producers, the Minister asked SEAC to look again
at its advice. This it did at its November meeting and on 22 December
announced that its advice remains unchanged; i.e. the feed ban
should continue in place. The Government accepts this advice as
its priority remains to remove BSE from the British cattle herd.
22. EU wide measures to combat TSEs are still under
discussion in Council. They would carry forward the existing ban
on MMBM in ruminant feed (with extra exemptions) and provide a
new ban on MMBM in all farmed livestock feed and ruminant protein
in all animal feed except dog food, but only in countries at highest
risk - so called category 4 countries.
National aids to pig sectors in other EU member
Recommendation p): MAFF must urgently gather comparative
information on costs, charges and subsidies relevant to the pig
industry in other member states, rather than leaving these matters
to the industry. The Ministry must be especially assiduous in
challenging through the European Commission any national aid scheme
which might appear to infringe EU competitiveness of trade legislation.
Our view is that market stabilisation schemes should be available
in all member states or none at all. We cannot accept that it
is an impossible challenge for our embassies in other EU states
to gain proper intelligence on the issues. In the light of the
disparities arising from the unique burden on the UK industry
and the significant subsidies paid to some EU competitors, we
urge MAFF to direct its efforts to ensuring fair competition.
23. In line with its comments in its original response,
the Government continues to be assiduous in bringing possible
illegal state aids to the attention of the European Commission.
Following requests from the UK, the EC have been examining several
possible illegal state aids announced by the French Government.
Amendment of taxation regulations
Recommendation q): We consider amendment of the
tax system to take into account fluctuation in earnings of UK
pig farm businesses to be impractical.
24. The Government agreed with the Committee.
New market strategies for UK pigmeat
Recommendation r): Greater domestic demand for
the less popular cuts of pigmeat would be beneficial to the whole
industry. The MLC, retailers and manufacturers must work together
to encourage and promote product development and processing with
the aim of reducing the current dependence on export markets for
low value cuts. Value added within the UK would increase. The
more marketable products that result would increase the total
volume of pigmeat consumed nationally, as well as substituting
for imported pigmeat, and creating new export opportunities.
25. With the development of pork mince and shoulder
steaks, for example, the industry has recognised the importance
of increasing demand for less popular cuts in the domestic market.
Pigmeat marketing co-ops
Recommendation s): We support the recent initiative
by the National Farmers' Union to persuade producers to forge
new co-operative alliances among themselves and across the industry
for marketing purposes and commend this action to the UK pig sector.
26. The Government agreed with the Committee's view.
The Minister of Agriculture, Fisheries and Food announced his
intention that pig producers should benefit significantly from
the extra £5 million earmarked to help farmers improve their
marketing, collaboration and competitiveness. Discussions with
the industry took place on how to make best use of these funds.
Some funds were transferred to the devolved authorities. The Government
provided £2.3 million to support the MLC's British Quality
Standard Mark for pigmeat promotional campaign (see paragraph
Closer linkages in the UK pigmeat supply chain
Recommendation t): If pig producers are in future
to obtain larger proportion of domestic market share and increase
margins of profitability for their product, they must strive to
forge stronger links with retailers, abattoirs, processors and
each other. A greater appreciation by farmers, processors and
retailers alike of the economic constraints and motives of all
the other elements of the supply chain will in our opinion lead
to greater efficiencies of production, benefiting the whole of
the UK industry.
27. The Government agreed with the Committee's view
- see paragraphs 6-8 on action taken by the Minister of Agriculture,
Fisheries and Food.
Long-term strategy for the UK pig industry
Recommendation u): Our view is that the compartmentalisation
of the UK industry has raised unnecessary barriers to its becoming
truly cost and price competitive. Ultimately, this could threaten
its survival. We recommend that MAFF, the MLC and leading representatives
from among producers, abattoirs, processors, manufacturers and
retailers meet to define a long-term strategy for the industry,
addressing both supply-side and demand-side issues. Such a strategy
should set clear and unambiguous targets for each element of the
industry which are easily verifiable, open to review on a regular
basis, and which could be co-ordinated centrally by the MLC's
Pig Strategy Council. The strategy should address producers and
procurement policies, marketing and co-ordination, and regulation
and the European dimension.
28. The Government believes that the strategy drawn
up by BPEX provides the means to meet the Committee's stated objective.
1. The Select Committee's Fourth Report took the
form of a letter of 21 April 1999 from the Clerk to the Committee.
In the letter, the Clerk spelt out five criticisms of the Department's
Response to the Third Report:
(i) The Government's
attitude towards the pig sector had been complacent;
(ii) The Government had failed to address the issues in Recommendation
(iii) The Government's response to Recommendation (b) was
(iv) The Government should have provided information on relative
production costs in other EU member states, in line with Recommendation
(v) The Government should monitor all commitments made by
the BRC on welfare, sourcing and labelling as set out in Recommendation
2. The Report also maintained that as it was an NDPB,
the Government should have responded on behalf of the MLC.
3. The Minister of Agriculture, Fisheries and Food's
letter of 9 June 1999 to the Chairman of the Select Committee
set out in some detail why the charges made in the Fourth Report
were invalid and there is little more to add. The one exception,
in respect of Recommendation (g) (see paragraph 11 of the Government's
Implementation of the Committee's Third Report), is that the Minister
of Agriculture, Fisheries and Food has now appointed a "verification
officer", whose remit includes identifying cases where product
is being sold at retail or catering level which misleads the consumer
into believing it contains pork of British origin when in fact
it is imported; and checking progress on the commitment by major
retailers that all their own label fresh pork and certain processed
products such as bacon would come from stall and tether and MBM
free production systems.
Ministry of Agriculture, Fisheries and Food
Recommendation b: We recommend that MAFF ensure
that a thorough and well designed sampling procedure of wildlife
species other than the badger be put in place in the badger removal
areas to determine if M. bovis can persist in other species when
badgers are removed ...
20. The two research projects in place, one run by
Oxford University and one by the Central Science Laboratory, are
continuing and will last till 2002/2003 respectively. Results
will be published in full when they become available. The CSL
project looking at the contribution of other wildlife involves
collecting wildlife carcases. By 31 August 570 carcases from 25
species of wild mammals other than badgers had been collected
and are being analysed in the laboratory. Results are not yet
available. The Oxford University project is examining clinical
samples for M.bovis from live trapped wild mammals in order
to determine the risk to cattle. Nearly 1000 samples have been
examined so far and several mycobacterium isolates are undergoing
final confirmatory tests to establish if they are M. bovis.
Research into transmission
Recommendation c: We recommend that
further research be undertaken into the relative importance of
cattle to cattle transmission of bovine TB and means of controlling
Recommendation t: We disagree with the suggestion
that it is unnecessary to prove how a disease is spread in order
to deal with it successfully, as it would answer much of the debate
if the transmission routes were to be identified.
Recommendation u: We recommend that
MAFF provide more funding for research modeling spatial distribution
of transmission patterns and routes commissioned from the best
scientists in the field.
21. During 2000, on the advice of the Independent
Scientific Group, the Government initiated a research programme
to investigate the pathogenesis and transmission of tuberculosis
in cattle. This programme includes laboratory experiments and
field studies. The aim is to obtain a clearer understanding of
how and at what stage of infection transmission of M.bovis
occurs between cattle, and to improve knowledge of the immune
responses detected by diagnostic tests so that testing procedures
can be improved. In addition to the modeling studies already in
place, part of the new cattle pathogenesis work includes development
of a mathematical model for TB in cattle. This work is of fundamental
importance in advancing control of the disease. Results from this
research, which started in July 2000 and finishes in December
2003, will be published when available. MAFF has also advertised
for new approaches on molecular epidemiology to address this area.
research proposals submitted in response to the open competition
launched in May 2000 are currently undergoing appraisal by independent
22. The recently started projects investigating pathogenesis
and transmission of TB in cattle will help to answer some questions
on the importance of cattle to cattle spread. Molecular epidemiology
studies on the different strain types of M. bovis will
help to link sources to outbreaks of infection. A study at the
University of Bristol is investigating potential routes of infection
to cattle from grass contaminated by infected badgers.