Examination of Witnesses (Questions 140-159)
MR DON THOMAS, MS LYNDA JAMES, MR REES ROBERTS AND MR BOB BANSBACK
TUESDAY 11 DECEMBER 2001
140. That is very helpful, but your membership has nearly doubled, and, from the information given last week by the farming unions, you account for over half of the farmers in Wales. What are the reasons for this surge in membership, do you think, and are they all farmers?
(Mr Thomas) Yes, all our members are farmers, they have to be livestock farmers, resident in Wales, that is a condition of membership; they have to have residency, they have to have a farm that is essentially within the geographical region of Wales.
141. Can I just stop you there. Does that mean they have to live in Wales, they have a farm in Wales, or can they live over the border and have land in Wales?
(Mr Thomas) I think the farm is what we seek as being the membership, the farm has to be in Wales, the land itself, the entity. Technically, I suppose, a member can live elsewhere, we do have potentially some members who actually have land in Wales and they may not actually live in Wales; but it is the farm, it is the holding, that is important, because what we use as the holding is the source of origin of the stock. Our definition of Welsh Lamb and Welsh Beef, which I am sure we will discuss later, is animals that are bred, reared and born in Wales; so the land has to be physically there. So, as we look for particular identities, it is a very important issue in geographical identity that the actual animals are coming from Wales, so the land has to be; so that the eligibility for membership is that they must be a farmer and they must have land in Wales and must farm on that land in Wales. So we like to believe that the increase in membership is particularly down to our success, obviously; people are not forced to join, it is a voluntary arrangement, it is a free arrangement, they are encouraged to join but there is no mandatory statutory requirement for them to do so. I guess, one of the areas where we have seen a lot of growth in is in the Farm Assurance concept. We manage and run that and we promote that heavily; so, consequently, a lot of farmers, I believe, feel that they want to be part of that process, and they are encouraged to be part of that process, because it is an important marketing attribute and marketing tool, and they are encouraged to join Welsh Lamb & Beef Promotions to participate in the Farm Assurance Scheme as part of their activity.
142. What has been your investment in that scheme?
(Mr Thomas) Substantial. The scheme was founded several years ago, we have tried to establish it for Wales, similar schemes exist in England and Scotland; we think it is important to have a regional identity to the scheme. Our schemes are fully compliant now with European Farm Assurance Regulations, it is now totally certified by United Kingdom Accreditation Service.
143. So what has been your investment in the scheme?
(Mr Thomas) In terms of money and time; I think it is time, mostly, we have invested a vast amount of time in developing the protocols, in developing a structure to enable the inspection to take place, and we have invested an awful lot in man-hours, I guess. There has been no real capital investment, it is merely the time that we have dedicated to develop it.
144. Does that mean a lot of time?
(Mr Thomas) A vast amount of time, yes.
145. Could you give us an indication?
(Mr Thomas) I would imagine it has taken almost, I guess, two full-time people a week, so it is about 80 man-hours a week, constantly, to maintain and develop the scheme; and, out of a small team, that is a substantial resource.
146. And, about this scheme again, what do you think are the rewards for the farmers?
(Mr Thomas) I think the farmers actually have a route to market, it is an important route to market, these days, it has become almost a prerequisite, requirement, of many markets, certainly in the UK and overseas, that the animals are produced to an agreed protocol of assurance. I think quality assurance is becoming an essential part of the meat industry, and farmers are having to play their full part in that; in fact, farmers are already playing their full part in this, because the standards and the protocol are quite embracing, in terms of how the animals are reared, how they are maintained on the farm, how they are housed, how they are fed, how they are looked after, their basic rights to certain welfare considerations. And I think many consumers are finding that a very useful tool and are looking for this type of assurance, that the meat they buy has been reared in accordance with a welfare conduct code.
147. I would like to go back now to the role and influence of the farmers in the WLBP. Could you tell us, as a Committee, how you take into account their views?
(Mr Thomas) The farmers, effectively, are the shareholders, all 7,500 of them have an opportunity to participate in the control of the business.
148. How do they do that?
(Mr Thomas) They are invited and are able to attend annual general meetings each year.
149. And do they attend, what is the percentage of attendance?
(Mr Thomas) About half a per cent of our entire membership, I guess; but it is typical of such a body, any co-operative finds it difficult to get people to attend AGMs. We do produce a newsletter, which my colleague Lynda actually prepares, which is posted out to farmers, to keep them informed; we believe that communication is important. But if there is an issue, obviously, then they have a perfect right to come and air their views. At the AGM, they actually appoint a board of directors, they appoint the auditors, and they receive and adopt the annual accounts each year, a copy of which is posted to every one of them, annually.
150. Can you think of an example where they have brought an issue to your attention and it has had a good airing and it has had a good result?
(Mr Thomas) Yes. The ones that do come, obviously, are extremely participative, they take part fully and are encouraged to take part fully, and the AGMs are usually two-way communication. The issues are, as one would imagine, they want to secure as beneficial a market-place for their production as possible; so they are after market benefits, really, that is the whole reason they are involved in Welsh Lamb & Beef Promotions, to differentiate their products as Welsh Lamb, Welsh Beef, and to have them marketed and promoted into any market globally on that basis.
151. Do you hold the AGMs around Wales, or are they in the same place?
(Mr Thomas) Yes. Lynda, do you want to comment.
(Ms James) We do, we move them around, and we make sure that, because the membership is distributed around Wales, obviously, it is important that there is representation, there is a meeting in North Wales as well as South Wales, West Wales, Mid Wales, so we make sure that that happens. In fact, when we attend events, such as the Winter Fair last week, we have membership recruitment stands available, we ensure that the members have an opportunity to talk to our staff, our executive staff, the two employees who are totally focused on Farm Assurance throughout the year. We do receive a huge amount of 'phone calls in the office, there is a lot of communication within our membership every week, there is quite a lot of feedback, in that respect.
152. And what do you think your members have, in comparison with farmers who are not members?
(Mr Thomas) That is very difficult, because we promote generically in the market-place, in the consumer market-place, we promote the concept of Welsh Lamb and Welsh Beef as brands; so there are possibilities that farmers who are not members of ourselves that reside in Wales will get benefit from that promotion and from that brand identity. We believe that all our members, and they have to be members of ourselves to be Farm Assured, there are undoubtedly differential prices offered for Farm Assured stock, so I guess we could say that, if a farmer is a member of Welsh Lamb & Beef Promotions and is consequently Farm Assured, at times he would expect a better payment for his stock, on the basis that they are being procured as Farm Assured.
(Ms James) Can I also add, a fundamental issue as well is that there would not be a market if the farmer did not have Farm Assured produce, then there would not be necessarily a market opportunity, because, a lot of the customers that we deal with, because it is demanded back from the consumer that the product has to be Farm Assured, there may not necessarily be a market opportunity there; so it is that market opportunity as well that we think our members have.
(Mr Thomas) Yes, it is accessibility and a route to market, and an improved return from the market-place for having the Farm Assured designation on the stock, I think that is what we see our members getting a beneficial return for. There was another benefit that did accrue to members of Welsh Lamb & Beef Promotions, because Farm Assurance was an added attribute, there was an enhanced payment made to people under the (Tyr Go Vol ?) Scheme, last year, it was a 10 per cent enhanced payment made by the National Assembly for people who are Farm Assured, it is one of the incremental points that they increased the payment to; so in that way the members got an enhanced payment from the Assembly. So that is another benefit.
153. Can I ask one question of Mr Rees Roberts, Mr Chairman. Because of your position, your involvement with Meat and Livestock Commission and also the Welsh Lamb & Beef Promotions Ltd, do you sometimes find there is a conflict of interest?
(Mr Roberts) Absolutely not. My belief is that the operation of the two, and there is a third operation which is active in Wales, which is the Agri-Food Partnership, and, as you heard earlier from a colleague, WDA are now involved with food and its promotion and marketing, those three organisations work very well together. There are a number of issues. There are fiscal, in terms of promotion funds from the MLC and funds from the WDA being pumped into the contribution that the farmer members, all farmer members, make into the organisation; it is an organisation that goes back to 1983, when farmers started it. But that pump-priming of membership has sucked in more money from the other organisations. So, I think, the MLC and the Welsh Lamb & Beef are working well together, that is my belief; and it is an evolving thing, you will hear later how the MLC now has a Welsh organisation and Welsh Council, which we will deal with later, those two organisations are getting closer together and work very well, in my belief.
154. Just one final question, on your position. Can I ask, when did you become Chairman of one and the other?
(Mr Roberts) Three years ago.
155. Which came first?
(Mr Roberts) Welsh Lamb & Beef first; they were reasonably close together. There is no official link between the two; it is just, in my own experience and career, they seemed to develop in tandem. But they are term appointments and my term will come to an end in due course.
156. On the subject of Farm Assurance, which you were touching on before, it is a lot of work and a lot of money goes into making it viable; do you feel that you are undermined by imports, when you have put in all this effort?
(Mr Thomas) Yes. Some of our members feel quite strongly about that, obviously. We believe that we have a very robust system of agriculture in the UK and a very robust system of meat processing, and the rules and regulations are pretty involved. Our farmer members do comment, when they see possibly imports coming in that are not to those standards, particularly, for example, Farm Assurance, because they have had to invest in that, they pay a subscription, they undergo an inspection annually, and they feel aggrieved that possibly some of the imports may not be to that standard.
157. And, of course, that throws in the risk of importing disease as well, does it not?
(Mr Thomas) Yes, indeed; yes.
158. Before I put my question, can I just place on record that I am a member of Welsh Lamb & Beef Promotions Ltd, and, also, through statutory levies, I am a contributor to the Meat and Livestock Commission. You say, in your evidence, that you "utilise the imagery and perception of the green, green grass of Wales" in your marketing. How do you go about that?
(Ms James) We see the benefits of Wales as quite unique, in being able to promote the product Welsh Lamb, Welsh Beef, so, obviously, we would encourage, because, Welsh Lamb, Welsh Beef, they graze on the green grasslands of Wales, we see that as quite a unique selling proposition for the brands, and, as Wales is recognised as a country with a lot of rainfall, etc., the derivative is obviously a product, the brand. Now how we do it; we look at the different market sectors, obviously we promote alternately to the consumer, so our target market is the consumer, but we do that through the different vehicles, i.e. the multiple retailers, independent, service food sector, and we use the imagery in advertising. We launched a Welsh Beef TV commercial in 1998, and Prince Charles launched it for us, in Wales, and we concentrated very heavily on the green, green grass imagery within that. We see that, the strap-lines, it is natural, it is the natural environment, it is unique propositions for the brands, and we have been very successful in doing that. The consumers themselves have been very receptive to that particular imagery, which is obviously quite important there; we have taken the strap-line, the green, green grass of Wales, from a well-known songster, but that has actually helped us, helped raise the profile. You ask how we do it; in lots of different variations, through the form of television, radio, through the form of advertising, we ensure that the branding, where we can, is on the packaging as well, which is very important.
159. You do not think New Zealand and Ireland have captured that green image before Wales?
(Mr Thomas) They have certainly copied us; but I think it is a powerful image, it is used by New Zealand. I do not think they got in first, or we got in first, we have been using it for some time. I think we need to position Wales with having a unique selling proposition, and I think it is landscape, it is environment, is one of the ones that we have seen and carries most emotion amongst consumers both at home and overseas. So we do have a very green landscape, and our greenery is green for 365 days of the year, which is not necessarily the case in New Zealand, and we do use a lot of that perception. We also underpin the perception, of course, with these robust assurance schemes, because we find that imagery and perception today is not enough, we have to have something that underpins it, we need the pillars of assurance schemes.