Examination of Witnesses (Questions 500
WEDNESDAY 2 MAY 2001
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
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.
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
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 observationand
of course all the profit is made on the topbut 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 farmingwhich
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 chainit
is surprisingyou 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
508. Could I ask one last questionit
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 suggestand
this is both from our research and from the IGD's researchthat
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) Yesaround 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 regardlessalthough 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.
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 economybecause that is where we
will go, is a market economyand 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 outI mean, it has not added to the cost. One
of the things I have noticed, coming into farming, is the amount
of paper about.
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.
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 problemand
I could not answer iton 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 wantedin terms of, you know, his movement was restricted,
but he understoodand, 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.
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
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.