Agriculture and Rural Development
Friday 30 June 2000
MINUTES OF EVIDENCE
Pig and Beef Industry
(Ulster Pork and Bacon Forum)
Rev Dr Ian Paisley (Chairman)
Mr Paisley Jnr
Mr R Overend)Ulster Pork and Bacon Forum
The Chairman: Mr Overend, you very welcome to our Committee, I am glad you were able to come. We can give you ten minutes to make a submission to us and then we would like to use the other minutes that we have, 30 minutes, for questions because we probably learn more by question and answer than we do -- we have already had a submission really, partly from you and from the Ulster Farmer's Union anyway which has already been referred to, but it is all yours and very welcome.
Mr Overend: Thank you very much, Mr Chairman. Now first of all could I say thank you to yourself and to the Agricultural Committee for the opportunity to speak to you on behalf of pigs. I do know that the Union have been in this morning. Regrettably I wasn't aware that they were coming in to speak on pigs specifically. So I don't want to take up your time with going over some of the ground that they have probably covered. I would like to pay tribute to Lynn Martin here on behalf of the Pork and Bacon Forum for preparing this for us. Lynn is secretary to the Pork and Bacon Forum and does a tremendously good job.
Could I just briefly at the start, Chairman, draw your attention to this graph which I hope you have all received. You can see right across there that is estimated break even. That would be taken on the basis of a reasonably good herd producing reasonably good pigs and getting a reasonably good price for them. You can see that while the UK prize is well below that break even then Northern Ireland is in the disastrous position. So it is from that point of view that I speak to you today and I'm grateful that you have given me an opportunity. Now if you haven't got those then we will have to see about why they haven't come through to you and we will get copies to you
TheChairman: Thank you very much.
Mr Bradley: Is it a birth to bacon graph?
Mr Overend: That's a birth to bacon graph, yes.
The Chairman: Birth to Ulster fry?
Mr Overend: Yes. I understand that immediately after you break up that you will be going for your lunch, so could you take pity on the poor pig man and eat some good Ulster pork or Ulster bacon having your lunch.
The Chairman: I had Ulster pork yesterday Robert, I'm glad to be able tell to you.
Mr Overend: The Chinese are our best customers for pork and they make a point of eating it every day.
The Chairman: It is as well they are not Jews.
Mr Overend: Actually they do keep quite a lot of pigs in Israel, I understand they eat the pork as the alternative white meat. Just on the bottom of the first page that you have got there in 1998 November we did a dissection exercise on behalf of the Pork and Bacon Forum. What we did was we sent off a pig for slaughter and then that pig was brought back and it was dissected in the various cuts and if you would be interested in following it right through I can give you a breakdown of all the different cuts that the pig went into. Now, we would accept the fact that it is always difficult to sell some of the less popular parts of the pig, but on that particular occasion we priced it on an average price based on about eight different outlets that were selling pork. And the thing at that particular time which gave us so much annoyance was that the farmer was really in a very very serious loss making position. Although he had improved from 32 right up to 42 for his pig. But when that pig was cut up and presented in a proper way by the supermarkets and the private butchers then the price of the pig rocketed from it left the farmer at 42 until it came right up to about 181. Now, at that time you remember the farmers were really in distress and suffered a lot of hardship. We did the same exercise in June this year, now the farmer was into a situation where he was just on break even at 61 and that would for his top grade pig at the top price. Nd we found then that the retail price went into 187. Now it is an excessive mark up, I would accept but the differential between the farmer was getting in '98 and what he was getting now had increased by 50%. In other words, the pig had gone up from 42 to 61, yet the price in the shops that the customer was paying had merely gone up by 5.00. Now there are only three people who are really involved in the exercise, there is the primary producer who does what I would say is most of the work, produces the ideal raw material for the processor to slaughter and cut and pack; then there is the retailer. Now, our argument still is that there is excessive profit being made by the people post farm gate and we would appreciate if you, sir, and general your Committee could look seriously at this point.
The second point that I would like to make is that I was over in England recently, there were 16 people at the meeting, one of them was fortunate enough not to be a pig farmer, but the other 15 people are employed in producing pigs. I was the only person at that particular meeting who had sons coming after me, all the other people who were there would be going to a dead end. That's in the pedigree sector which has suffered considerably, but not to the same extent as a commercial person. So that is another serious thing which you have to look at. Just this week I talked to a barrister and an accountant and a school teacher, they were all coming originally from farming backgrounds. All three of those people had started in their life producing pigs. So the primary consideration of a lot of farmers' sons over the years was: How do I get some pocket money for myself and be independent of the old fellow who was still controlling the purse strings? And 99% of them kept a few pigs, now that's changed all over and those same three people told me, and the come from three different areas in Northern Ireland, that the young farmers in their area at the moment are 50 plus and that most the farmers would be 70 plus. So we face a situation where we are producing the words most popular meat. Thanks to our Chinese and our friends out in the South-east Asia pork is the most popular meat in the world. In 1998 it was estimated that the world produced about 88 million tonnes of pork and there are people who are saying to me: The pork industry in Northern Ireland is so small that it is not worth bothering about. Really, if you look at it you would have to accept that on a world view. If you take what we are now producing in Northern Ireland you would eat it in about 6 hours in a year, but you have to take into consideration just how important the pigs are to the people who farm in Northern Ireland. If you are producing milk you have a quota, if you process beef you have a quota, if you are producing sheep you have a quota, if you are producing grain you get some subsidies.
Nobody knows how hard I fought to keep Northern Ireland out of the Common Market and there will be a lot of other people who supported me because my argument was that as an offshore island we couldn't compete with the continentals who had the cheap raw materials. We are now in a situation where we are competing occasionally, for example, directly against Spain. Now Spain in their wisdom when they joined the common market got a derogation and their grain price is based on the world price. They can produce pigs, they tell me, for the equivalent of 62p a kilo whereas we need 95p to break even.
Now I won't bore with you the fact that we owe millions of pounds to the banks and to the feed companies. And I would like to pay tribute to the banks but especially tribute to feed companies who have carried us through this severe crisis and are continuing to carry us at the present time. I would hope that there is something, although I know that there is great difficulty that you can do for to help and sustain an industry that to me should be considered a primary important industry in Northern Ireland.
The Chairman: Thank you. Well if I could just say on behalf of my Committee I know we are all agreed on this, we want to retain the pig industry in Northern Ireland. Any time we have met DARD and met the Minister we have emphasised and especially when we were under the Direct Rule Ministries we asked them very bluntly and frankly: Do you want to destroy our pig industry, please tell us what your objective is because you have gone the right way about it. And also when we see the sort of grants that eventually came to pig farmers in the Irish Republic and came to pig farmers elsewhere in Europe and yet they said because they took a few pigs off the hands of people that that was all we were going to get. So I think that the pig industry has been very shabbily treated by the Government. In fact, I never was at a meeting, I say this with great regret, I never was at a meeting where I ever witnessed among the officials of the Department any real gravity or concern about our pig industry. The meetings were far too hilarious, they were far to taken as a matter of fact, there never seemed to have got home to them the crisis that we were in and we are in a terrible crisis. The trouble is that if there is any rise again the debt is still there and that debt has to be met. So that is what we are actually engaged on at the present time, to find ways, to apply our minds and any talent God almighty has given to us to find a way out of the impasse that we are still in. We hear talk about this pig industry breaking even. Well it might be breaking even, but that doesn't deal with the debt that still hangs round the people. So we can assure you we have an interest in the pig industry. We want to preserve the pig industry and we want to keep the pig industry.
Now, my friends here would like to put some questions to you. Gardner Kane?
Mr Kane: Thanks Chair. Welcome once again, Bobby. Is it not the case there was a general oversupply of pigs within Europe? Is it not also the case that there was an oversupply the pigs in Northern Ireland that created the whole situation in the first instance?
Mr Overend: Chairman, there has never been an oversupply of pigs in Northern Ireland because we are part of the United Kingdom and the United Kingdom has never been self sufficient in pork and bacon. Now it arrived at the point where it was quite close to being self sufficient in the amount of pork that it required, but it was always under supplied in the amount of bacon that it eats. Our main market was the south east corner of England and we would have specialised in producing back bacon and breakfast bacon and that was the main source of our income over the years. And for a number of years I was a Director of the Cookstown plant but when it was still owned by the pig industry in Northern Ireland and that is where our main market was.
I accept that in Europe a glut of pigs came about simply because of the serious money crisis in Russia. Russia's was always a main market for the cheaper cuts of pork and bacon out of Europe and whenever our strong Pound against the week Euro then that sucked in all the surplus.
Mr Kane: Chairman, I welcome the comments here from Bobby. A prior organisation stated that there were over oversupply of pigs in Northern Ireland that contributed to the current crisis. I welcome your point on that.
Mr Overend: We have never been oversupplied with pigs in here in Northern Ireland if you base it on a UK demand. Currently at the moment we are seriously undersupplied. If it wasn't for the fact that the strong Pound was sucking in somewhere in the region of 8,000 to 10,000 pigs a week from our neighbour then some of the factories would be in such a serious position that they would have to close.
Now those of you who have a long memory can remember the time when we were forced to shut the bacon factory in Enniskillen and caused a major problem at that time. We had to close the slaughter line for the simple reason that we couldn't get enough pigs in Northern Ireland to keep that line going. The Newry plant used to kill somewhere in the region of 4000 to 6000 pigs a week and it also closed for a shortage of pigs.
The Chairman: We have evidence today that the UK is now importing pig meat to a very large extent.
Mr Overend: Well England always imported quite a lot of pig meat, but it normally imported it in the shape of processed product which was coming in primarily from Denmark and Holland. It is s now in the position where it is undersupplied with the amount of pork it takes and fresh pork is coming in. I personally am against the importation of fresh pork because it could bring some of the serious diseases that are prevalent on the continent.
The Chairman: Right. Mr Ford?
Mr Ford: Thank you Chairman. You make the point in the paper that you prepared to the Union on the need for an aid package, this is a comparison between the aid package which was announced earlier this year in the Republic and what is happening on UK basis; what are the inadequacies, as you see it, with the UK package insofar as we know exactly what's going on? What would you like added from the Republic's package to produce a Northern Ireland top up if that were possible?
Mr Overend: Well the main problem I have with the UK package is that, first of all, it is based on the UK and doesn't take into consideration any of the regional problems that we would have that are over and above the normal problem that has been faced during the crisis.
The second thing is that they have what they term an outgoers scheme and then they have an ongoers scheme. The ongoers scheme will only kick into place after the outgoers scheme has been finalised. If we are going to continue to produce pigs we need an ongoers scheme that is separate and to which we could maybe key in right away and get some money. If you come out of sharp short shower of rain and you are wet there is no point in somebody reaching you an umbrella, you need it before you get wet. By the time you get your clothes changed then you don't need the umbrella. I would like to see that there would be something coming through right away to try and sustain the industry rather than to look and see how can we help the people who have gone. I mean, I have great sympathy with the people who have been forced out of the industry, but our primary responsibility at this point in time should be the people who want to continue.
The Chairman: Well we can't do very much for people who have been forced out because that is beyond us. It is also beyond the whole technique of the European common market which I also opposed as you will remember. But the point is this here, that we should be able to do something to help those who have clung on and are now in a position of seeing a little light coming to them. But what worries us as a Committee is the heavy debt and we are grateful for the banks, this Committee, the predecessors of it, we did put a lot of pressure on the banks, we believe that the representations were taken seriously by the banks. We did raise certain producers who were having big, big pressure put on them by the banks and there was a bit of relief on that. We hope that will continue of course because too many voices raising saying the pig farmers are out of their trouble is very bad because they are not out of their trouble because their debts are still there and have to be accounted for. Because a man is breaking even doesn't mean he is paying his debts, he is not going very far. That is a very important thing. But what I would say, if you were asked today, say you were made the Minister of Agriculture today, we are only a Committee, say you were the Minister of Agriculture today, what would be the first thing you would do about the pig industry?
Mr Overend: Well, Chairman, thank you for that question, what I would do is follow the guideline that has been put out by the National Pig Association and I have the honour to represent all the pedigree breeders in the United Kingdom on that particular Committee. They are now pushing and they have headed their statement: Prime Minister's Promise to Pig Farmers. He could immediately indicate that he is going to accept the BSE tax which is equivalent to 5.26 per pig since 1996. Now if he was to accept that and I know there is a Court case going through across on the mainland about that, but I mean instead of fighting that Court case if he had accepted yes, the pig people have a very good case and they have received no help at all, they should be getting that, it is estimated that that would have cost the pig farmers in the UK about 270 million. So if I was made Minister of Agriculture, which is extremely unlikely, then I would go right way to the Prime Minister and say: Honour your commitment. This indicates that in his speech to the farmers of the National Farmer's Union at their general meeting the Prime Minister promised pig farmers he was prepared to sit down and work it out. He also promised in his visit to the West Country cash to alleviate the BSE tax. Now there are those who sometimes doubt that he does keep his word, but on this case wouldn't it be nice if I was the Agriculture Minister and went over and said: Now my friend, you have an opportunity for once to keep your word.
The Chairman: Well it is, I'm sure you will agree with me, it is instant money to the pig man, not to producers, not to anybody in the ancillary industry, but right down to where it is needed.
Mr Overend: Yes.
The Chairman: Right. Thank you. Ian?
Rev Dr Ian Paisley: You say we have the best product, that we are pushing it out into a market where there is popular demand for it, that unfortunately we are now and importer of that product where unfortunately the consumer doesn't seem to realise the benefit of our product, where has it all gone wrong? That is the key question, where it has it all gone wrong for us, is the Department forcing on the us the wrong philosophy with regards to how we develop our product here where we are pushing welfare and quality when in reality everyone else across Europe indeed our competitors in wider field are pushing market forces and market prices? When I'm sitting in this chamber I'm always drawn to these three representations up here of three key industries representative of Northern Ireland: Textiles, shipbuilding and agriculture. Textiles and shipbuilding have been defeated by market forces, is agriculture next?
Mr Overend: This is a very good point. I appreciate, Chairman, we are not the best of marketers, I would accept that having been right through from the primary producer right through to sitting in Marks and Spencers place across in England in their Head Office and trying to convince them that we should eat our pork chops. They were amazed I was able to identify my pork chops on the plate from a pig that I produced, but it was quite simple because we have specialised here in producing lean pigs with a high percentage of lean in the right place. That gives you a big eye muscle and the eye muscle on the pork chop that was mine was about 30% larger than the other one. That is beside the point, I would accept that there is that difficulty. The same thing also applies in that some of the big major supermarkets prefer to deal only with pig people. That is why I welcomed the fact that Malton stayed in Northern Ireland because the supermarkets tend to work with big people.
But there is something that I think we could do and we could impress upon the supermarkets that they are being unfair to us here in Northern Ireland. If you go into a shop and buy a packet of cigarettes there is a Government health warning on it. Now if you go into a supermarket there is no way of clear identification which would indicate that this is a product of Northern Ireland which meets the welfare regulations imposed upon us by the Government but at the request the supermarkets, the supermarkets are the people who initially identify the welfare that they wanted the product they sell to meet. Yet they are then trying to push us down in price by putting our product on the shelf right beside a cheaper product produced not to the same high standard as us, and probably, most probably fed on meat and bone which we are not allowed to use. If you are not allowed to use meat and bone then the only real substitute you can put forward for that could be something like expensive soya. So you are on a hiding to nothing if your friends are able to use cheaper products to produce pigs which are then sold on a comparative basis.
The Chairman: Thank you.
Mr Armstrong: Would you agree with me that Government has a negative approach to agriculture and if pig producers would they come to a profitable state that the depressing prices which would even come back again and that Government then would be encouraged to diversify into other areas?
Mr Overend: The problem, Chairman, is that when I was young and you were allowed to go on a deputation up to meet the top brass at Dundonald House, then the person who had the authority and who wielded the big stick was actually the person who was in charge, the Chief Livestock Officer was the person who made the final decision. That has now changed in Dundonald house and it is the admin. people who rule the roost. Admin. people, with the greatest respect, have no practical knowledge or practical thoughts in their head. All they are interested in is running a successful team of civil servants and you can't do that in agriculture. There are times when you have to make decisions that may not sound to meet every requirement, but are what's required if you are going to stay in business. Certainly, the amount of people that work in Dundonald House would lead me to believe that there could be substantial savings there and passed down some way or other through some pipeline to the primary producer.
Mr Armstrong: That whenever pigs were maybe over produced again the price could drop and Government then would be encouraging farmers to diversify out of pigs?
Mr Overend: All my lifetime I have heard this, that you should diversify, I have looked at the people who went into rabbits and then some people went into chinchillas and some people went into mink and some people went into goats, there were all sorts of different things that people have tried, but the thing that would encourage me to stay with pigs is that it is the most popular meat in the world and Northern Ireland should surely be in a position where they can hold their own with anyone and given the level playing field then we probably could.
The Chairman: PJ?
Mr Bradley: Thank you Chairman. I think you mentioned 99% of people who had pigs at one time, I was one of those 99%. I think it was through Robert Overend's breeding that helped me rear my family and build my home, so you are very welcome. To say that as pig producers return to profitability, as follows on from Billy's question, the danger from increased production and profitability again that the market will be depressed once again from over producing?
Mr Overend: I wouldn't see that to be the case because there would be quite a number of people that I know and once the situation would change and they could sell their herd at a reasonable price then they would be out as quickly as they could because they would be scared that we are too small to compete on the world market. There is always the problem, and I looked, the Chairman would understand it, but I understand it, there is an early day motion that has been put forward over in Westminster by some group of misguided people that we should take away the farrowing crate from the use of the pig farmer. Now for those who don't know, a farrowing crate came into being during my lifetime. I can remember when you had to sit with a sow when she was farrowing her piglets. Now if you don't know what that means it is not like lambing a sheep or calving a cow or even foaling a mare because immediately it is out then the mother can successfully look after it. But it you take away the farrowing crate then you are going to be forcing the pig farmer to supervise for a minimum of 36 hours and some of them could be 48 hours before you can leave them. Now that would be total disaster and I welcome the fact Roy Beggs has put in an amendment to that. I would hope that our good Chairman here would look into that and see that goes no further because we must remember that initially it was an early day motion that came from Sir Richard Body that took the sows out the of the stalls, yet 99% of all the sows in the world are in stalls because they are the best welfare means of keeping sows.
The Chairman: When is that coming up in the House Bobby, do you know?
Mr Overend: It just came through on e-mail to me from the MPA a couple of days ago.
The Chairman: It must be something quite recent, it is important.
Mr Overend: Yes.
The Chairman: Very important.
Mr Bradley: Can I just ask, could you ever see a return to the day when the small 10/12 herd would be back in the north of Ireland again?
Mr Overend: I would like to see that and there is a way where these people could get back right away. The Japanese are the people who import the most expensive pork in the world because pork is the most expensive country to produce pork is Japan. The Emperor of Japan likes to eat pork from rare breed pigs, either Middle White or preferably Berkshire. Now there is a Japanese person who had been in contact with us through the British Pig Association. He would like to import about a thousand carcasses of Berkshire pork each week into Japan. Now Berkshires are a minority breed, they are suited for the man who wants to keep eight or ten or 12 sows, they only farrow twice a year, they normally rear about eight piglets to the litter, commercially they are not viable, that is why they have gone down in numbers and are now known as minority breeds. So if there is anyone who is interested then they should perhaps consider that. It might be a good exercise for the members of the Agriculture Committee, you know, it would keep them occupied when they would go home at night then they could look after a few sows.
The Chairman: PJ, go thou and do thou likewise.
Mr Bradley: Certainly if the Assembly collapses I'm trying to plan what I should be doing.
The Chairman: PJ, I think we are going to be successful.
Mr Overend: There is a thing that has been put out by Lloyds TSB: A Future for the Pig Sector. That might be something that would be interesting reading for the members of the Agriculture Committee. They would consider that pork being a very versatile product suits the four different people that they would have identified, that's the smaller household who is demanding cheap and convenient meals to meet their lifestyle; and then there is the ageing population like myself who is demanding food that meets their health and nutritional requirements; then there is the informed customers like civil servants who are demanding information and assurance about their food purchased; then there is the members of the Agriculture Committee who would be the affluent customers and they are demanding new experiences in tastes and products. Pork can meet every single one of them.
The Chairman: What is that booklet that you are referring to?
Mr Overend: It has come along to me there: Challenges and Prospects, a Future for the Pig Sector, sponsored by Lloyds TSB.
The Chairman: Clerk, would you see every member of our Committee gets a copy?
Mr Overend: Would you encourage them to read it when they get it?
Rev Dr Ian Paisley: Could I ask another question? You will be aware, Mr Overend, of the marketing campaign that recently took place identifying the fact that other producers outside of Northern Ireland will actually end up feeding the sow to the piglets at some point; what was your view of that strategy, that marketing strategy?
Mr Overend: That was sold to the NPA and to the MLC people by some high powered people who do marketing only. I wouldn't be terribly happy with that. One of the reasons I wouldn't be terribly happy with that is that if we could get a species designated place for to process our fallen animals and all the offal products that are coming from the pig through the factories -- a pig is an animal that can eat, process animals products and therefore that could be fed back. At one time, I think it is still probably a regulation, in Denmark that the pig industry must use all its fallen animals and at the moment we are having to pay 1 because of this BSE tax, every pig that we put through the factory, the offal from that pig, we have to pay to get it taken away. Now when I was a non-executive director in Cookstown the people who processed that actually came and made us a good offer for all the product because there were two or three people looking at it at that time, now there is just the one group who do that. So because of the BSE it moved from being a valuable product to being a product that we had to pay to dispose of.
Rev Dr Ian Paisley: If you were writing a marketing campaign for the industry, I mean obviously that campaign that you spoke about there, that was really to focus on, in fact, a scare campaign: By local or else. If you were writing a marketing campaign what would be included in your marketing plan?
Mr Overend: I think the best way to look at it is to look at pork. Over the year we have taken practically all the fat from the pig and we have by using the central pig test station at Antrim we have increased the amount of lean and the amount of fat that is left there is known as a healthy fat. In other words it is quite possible that you could get all the nutrients you want from eating pork. We have also made it possible for the pig to be produced and reach the slaughter weight that is the optimum slaughter weight at about four and a half months instead of seven and a half months. So you are looking at a younger more succulent pig and that is the line that I would like the marketing strategy to go down, to say to the housewife: Look, we are going to spend money, we are going to bring you out a lot of new products, we are going to give you something not only good for you but good for your children, that is the way you should encourage them to eat it.
Rev Dr Ian Paisley: At the right price?
Mr Overend: At the right price.
Rev Dr Ian Paisley: Thank you.
The Chairman: Thank you very much. Thank you, Robert, for being with us. You have certainly given us a lot of food for thought. We will take on board matters that you have brought before us. You will probably see some of the them referred to in our report when we get our report out. I might just say that the first part of our report will be out on Wednesday and we have been dealing with the chain from the farmer that produces it right through what happens. Mean you have a good illustration of that in your own submission. Then we are going on to the pigs and going on to the beef. There will be two other reports coming out.
We feel that we have all been very strong on diagnoses, now we need to get strong on our prescription so that we can remedy what has taken place in the past.
We thank you very much for coming. We wish you well in your business. We wish you well in those lean pork chops that you were talking about.
I must ask the members of the Committee just to wait for five minutes, we have business that we have to do while we have a quorum.
Mr Overend: Thank you again Chairman, if there is any help you think I can give you then I'm only glad to help.
The Chairman: We are glad to have your help and support.
Mr Overend: Thank you.
The Chairman: We will read about you in the farm journals.
30 June 2000 (part iii)/ Menu / 8 September 2000 (part i)