Agriculture and Rural Development
Friday 4 May 2001
MINUTES OF EVIDENCE
Inquiry into Certain Aspects of the
Livestock and Meat Commission
Mr Savage (Deputy Chairperson)
Mr Paisley Jnr
Mr C Duffy;)
Mr C Mathers;) Northern Ireland Meat Exporters'
Mr R Moore;) Association (NIMEA)
Mr C Tweedie;)
The Deputy Chairperson: You are very welcome. Before we begin, I must respond to a comment you made in the second paragraph of your submission on Livestock and Meat Commission (LMC) funding. You expressed concern that the Committee's inquiry was a duplication of the Government's five-year review of the LMC and that such double expense was not a good use of the public purse. I assure you that there is a big difference between a review that a sponsoring Department is required to carry out and one undertaken by a Statutory Committee set up under the Northern Ireland Act 1998 with powers to initiate inquiries and make reports.
The Committee's inquiry is focused on four main issues of concern to Members and their constituents. Members of this Committee are directly accountable to their constituents. This inquiry is, therefore, entirely separate from that carried out by the Department. However, the Committee recognised that the five-year review had taken place and referred to it in its Terms of Reference. The Committee will take that into account as it prepares its report.
On a different subject, I would like to ask Mr Duffy whether he believes there is any conflict of interest in his appearance today as a representative of the Northern Ireland Meat Exporters' Association (NIMEA) and having appeared last week as a member of the LMC.
Mr Duffy: Absolutely none.
Mr Mathers: Your letter to us referred to Government funding of the LMC. That was news to us. It was a useful comment, as it focused us on the source of funding for the LMC in comparison to similar meat promotion bodies in regions which are direct competitors. A previous Administration created the legislation under which the LMC operates and gave it a means of funding outside the Government purse. To date, all promotion of Northern Ireland beef and lamb products has been run by individual processor investment in conjunction with the LMC.
The issue is timely, as we believe that as in every other region of the United Kingdom - and the other EU states - there now needs to be the same level of Government support for the promotion of these products as exists elsewhere even on this island. If we are to compete in the markets available to us, Government- assisted promotion similar to that which our competitors enjoy is essential.
Secondly, we would like to draw your attention to the loss of LMC levies due to smuggling of sheep. The disposal analysis of Northern Ireland lamb production has shown that for many years, at least 500,000 lambs a year have been marketed as unrecorded exports to other parts of this island. Those lambs have been moved South in such a manner that they evade the LMC statutory levies, thus depriving the LMC of much- needed promotional funding.
Over the years, NIMEA has raised the issue of illegal sheep movements to the Republic of Ireland with the Department of Agriculture. It also wrote to the Revenue Commissioners in Dublin in 1994. It is interesting to note that it is movements of sheep between Great Britain, Northern Ireland and the Republic of Ireland that have caused the present foot-and-mouth disaster on this island. For that reason, we propose the introduction of a transaction levy, similar to the scheme in Australia, whereby the LMC would draw levy funding from sheep every time they pass through market.
My third point is that, as you are well aware, the whole area of classification and the LMC has been given some airing. Classification is a statutory EU requirement with which all member states are obliged to comply. When the Government decided to privatise the classification service in 1990, the industry was forced to seek an alternative body to perform that function. The entire industry requested the LMC to take on the function, as it was deemed the one single professional classification body across the country. It gave uniqueness to Northern Ireland and had a better chance of delivering a provincial standard.
The LMC performs this service under the supervision of the competent authority, which, in our case, is the Department of Agriculture and Rural Development. In hindsight, the performance of this service by the LMC has resulted in it being maliciously scandalised by various groups. As a result, we are concerned that the LMC's promotional independence has now been tarnished as well. It has been forgotten that all parties in Northern Ireland requested the LMC to perform this function, even though the EU allows each plant to put their own classifier in place if they wish. If that were to happen in Northern Ireland there would be 11 classification bodies rather than one.
It should not be assumed that if the current situation were changed, all plants would simply transfer to any new body. Is it not better to have one body across the Province doing the job to a single monitored standard rather than a plethora of bodies trying to operate a national standard?
My next point is on the business of unco-ordinated promotion. It is our opinion that some Government and other agencies - for example, the Department of Agriculture, IDB, LEDU, and rural development authorities - are doing what we can only describe as unco-ordinated promotion in respect of the meat industry. Some District Council activities have also involved such promotion. On occasions this has embarrassed some of our premium customers.
It is our opinion that there should be one single spearhead promotional body in respect of the beef and lamb sector, and that it should be under the umbrella of the LMC. That would ensure that a much more efficient and fruitful use of resources would be made. It is absolutely essential that Northern Ireland has an independent, professional promotional body to match those of our competitors in these islands.
The LMC must become the driving force to spearhead quality initiatives and investigations into the branding of Northern Ireland beef and lamb. The LMC should also collate the available data to harness the knowledge gained through the farm quality assurance scheme and to make realistic forecasts on the availability of quality raw material for the industry to market.
Armed with that type of information, the processing sector can perform a marketing function directly related to production, thus being more efficient and adding real value back down the chain. Currently, nobody can tell either the number of quality cattle or sheep available for any given time ahead. Only an informed guess can be made, therefore, in relation to the availability of quality raw material.
In the age of electronic data interchange, that is surely a severe drawback to the entire marketing programme for beef and lamb from Northern Ireland. It is therefore essential that Northern Ireland has a professional and properly funded beef and lamb promotion body to ensure that the industry can match the activities of its competitors in the UK, continental and - it is to be hoped - world marketplaces.
The Deputy Chairperson: You said that the LMC should have control of all promotions in the meat and lamb sectors. Can you describe the areas currently covered by the Department of Agriculture and Rural Development, LEDU and IDB? Why, in your paper, do you describe this as "meddling"? Can you give specific examples?
Mr Mathers: Moneys are available through all the bodies I mentioned for the promotion of meat or lamb products, either in the UK or in other EU states, but there is no co-ordination. All of that does not work together in one spearhead to the direct benefit of all of Northern Ireland. Everybody does their own wee bit in relation to their own area, but it should be spearheaded, collated and pulled together in one driving force that represents Northern Ireland.
Mr Duffy: The LMC is at the forefront in promoting Northern Ireland produce. It understands exactly what is required in relation to quality and what the customers want, along with the people who sell the produce. There are divergences as you go down the chain with the other agencies we mentioned. Co-ordinating those divergences and making sure that there is a focus on value for money is important. That also applies to research.
The Deputy Chairperson: You said that the levy should increase from 80p per head of cattle to £3. When producers are already experiencing low or no returns, how do you expect them to pay this additional levy and still make a profit?
Mr Duffy: The LMC requires enhanced funding. There are a number of options, and we suggested some of those. You only have to look at how similar bodies elsewhere - in England, Wales and other countries - are being funded. The main issue is that the LMC is underfunded. To be able to seriously compete with other bodies, for example An Bord Bia, it must have an enhanced funding portfolio.
The Deputy Chairperson: It is easy to say that they must be competitive, but if the farmer in Northern Ireland is not getting a reasonable return, or, indeed, getting no profit at all, there will be no farmers here to compete with. They have come through a difficult patch. If there is going to be a levy increase, somebody somewhere along the line must bear the brunt of it.
Mr Duffy: Yes, but if we do not continue to promote then the return will be even lower. We have a product that we have to promote on world markets. If we draw back from that just because there is an impending deficit in the LMC budget, it does not mean that we have to cut back. We should actually be trying to increase promotion, with greater emphasis on certain areas. The formula for where the money is found is a matter for further debate.
Mr Dallat: The LMC's gross income in 1998-99 was £2·46 million. What would be an appropriate funding level for the LMC?
Mr Duffy: You have to look at the markets, where they are going and what they are competing against. It could be five times the 1998-99 figure and still not be enough. You have to focus on value for money and what your competitors are doing. It is very hard to quantify the exact size of that. There are definitely more funds required.
Mr Dallat: For what?
Mr Duffy: Additional funds are required for promotion of our produce on world markets. You say that the figure is £2·4 million. However, if the funding is increased, which it has to be, it is for the LMC to look at that and to spend that money wisely and in accordance with the demands that are placed on it.
Mr Bradley: One of the recommendations in the quinquennial review is to have annual reviews of the LMC levy, in consultation with producer and processor organisations. Do you think that a possible annual variation in levies would affect strategic promotional planning for the LMC, due to the variable income each year?
Mr Duffy: It would be advantageous if it could be reviewed annually to take account of competitive factors in other countries. It is a very competitive market. The LMC has already said in its submissions that it is operating on a very small, tight budget.
When you see what is being thrown at other retailers in these countries and the funds that are made available to the LMC's competitors, you realise how hard this situation is. The answer to your question is "Yes". I think that it would be a good thing to review the levy annually.
Mr McHugh: The question of whether the LMC is providing value for money and so on is an ongoing debate. If I remember correctly, the last time we met with NIMEA we found ourselves on the receiving end of a list of questions from you, rather than vice versa. You may have caught us on the hop that time, but I think we have learned a few things since then.
The reason we are inquiring into these things is that from our point of view, LMC's intention or purpose is to deal with classification and to try to be part of an industry that should be working in terms of our markets. When you talk about our competitors, I wonder how much of an impact we or the LMC are having on the market. Currently, farmers are inclined to say that they are not exporting anything anyway. What is the money being spent on now, and will there be any difference in the future?
You mentioned factors like the movement of sheep from Britain as being the cause of foot-and-mouth disease. I contend that while smuggling may well have been the end result, it is only a symptom. Smuggling is going on because farmers are not getting a fair price elsewhere. In any case, that is how they see it.
The meat plants are now in a situation where they do not even have marts to value their cattle. They have no outlets at all. We have seen lamb prices go through the floor in the last couple of weeks. Farmers are, therefore, up against the wall as primary producers. They are not seeing a lot of return for £35, or whatever considerable amount they have to pay. That is happening on an ongoing basis, so they are not seeing value for money; they are not seeing us impacting on the worldwide markets. Besides those set markets that have had to deal with us over the years, we must question whether we have impacted on the European market, for instance, even before the BSE or foot-and- mouth crises hit the industry.
Fall-out from BSE is still a reality, although it is hidden behind the urgency of the foot-and-mouth situation at the moment. Can you tell us what you are going to do in the future, in terms of the LMC, when we get foot-and-mouth out of the way?
My other question regards appointments and conflicts of interest. I think that there is a conflict of interest if people are seen to be more on the side of the producer. Indeed, from Mr Duffy's point of view it is almost necessary to have expertise in light of that. Certainly the primary producer thinks that there is a conflict of interest there. Indeed, one farmers' representative has been quite closely involved. Farm leaders should be independent, as should those who do that business and work on an LMC board as well.
Mr Duffy: There were a number of questions there.
It is unfair to say that the LMC had made no contribution to the European markets or, indeed, to the value that the producer was getting for his beef in Northern Ireland pre-1996. Prior to that year, Northern Ireland prices were probably the highest or second highest in Europe. You only have to look at the Albert Heijn business; all our members should be aware of how successful that was. I was not involved in that. However, from my previous experience in industry, I could see that it was definitely a very enviable position to be in. Northern Ireland's competitors were very envious of that. The facts bear that out.
As for the question of whether the LMC is currently providing value for money or not, I was fortunate enough to be here last Friday when the LMC made us aware of how funds were being spent. Its submission made it clear that given the limited nature of those funds, it has already put a greater emphasis on the local market in educating the consumers of the future, namely young people.
It also outlined its strategic alliance with the Meat and Livestock Commission (MLC) in ensuring that we keep a British label on our meat in Northern Ireland. You only have to look at the price differentials between Northern Ireland and the Republic of Ireland to see the success of that campaign. That does not take into account the promotional and marketing funding that has been contributed directly from the processors to the retailers in order to move the disproportionate amount of meat coming out of Northern Ireland that traditionally went to the European market.
The LMC is currently working on identifying particular niche markets around the world, because we are a very high-cost producer of red meat. We have to identify niche markets. It already has one, and it has held on to the Greenfields brand to ensure that there will still be a premium place for Northern Ireland meat in that market. The LMC is identifying other markets. When those markets open, it will launch an attack with the increased funding that it will hopefully have at its disposal. That should work its way down through the chain.
I sit on the board of the LMC and I am chairman of NIMEA, but that is not a conflict of interests. It is probably coincidental and it is not of my making that I want to take on those workloads, but it helps to bring greater focus. We can make decisions without having to go and consult and then come back again. We can make some very quick suppositions at board meetings on some things that are happening in the industry, like Miceal McCoy and his role in the Northern Ireland Agricultural Producers' Association (NIAPA). It is purely coincidental that he is now sitting on the board. I see it as an advantage, not a conflict.
Mr Mathers: Mr McHugh said that the levy was £35; in fact it is 80p per head.
Mr McHugh: I did not mean £35 per head. With regard to classification, I was saying that farmers were not happy with the way things were going for them the last time.
Mr Duffy: Naturally they are not happy, because their returns are lower. When prices start falling for a number of reasons, appeals, et cetera, will rise. You have to look at what happens in the market in Great Britain. Most of you are probably aware that some meat plants pay for their own grading service. If that were to happen in Northern Ireland there would be uproar.
My company's experience is that in a slaughtering of, say, 300 cattle in a day in England, 10-15 producers would be involved. One or two of them, or maybe none at all, would come to see their cattle being graded on that day by someone who has been employed by a grading service or directly by the plant. It is a task that the LMC is unfortunate to have in its remit. I cannot see any other way of having a standard that is as independent as it is at present. Unfortunately, it is very controversial.
Mr Moore: Mr McHugh said that one of the purposes of the LMC was classification. The last purpose that the LMC would ever identify with is classification. It was asked to take the service on, but it would be delighted to be rid of it. It is providing a service that can only attract criticism. It will never attract praise.
Mr McHugh: What is the purpose of the LMC?
Mr Moore: Its purpose is the promotion and expansion of the industry. The classification service was something that it was asked to take under its wing, and it has administered it credibly. In criticising the LMC, its visible activities in Northern Ireland, other than keeping farmers happy, are irrelevant.
Visibility in our markets is important. The fact that farmers do not know what the LMC is doing is not the issue. The issue is what the LMC is doing for the customers - the customers being the buyers of our product. That is where the achievements lie, and they are the people who should be giving their opinions.
Mr Douglas: Although you say that NIMEA members are happy with the classification service provided by the LMC, you also say that it has not been as consistent or rigid as the service provided by the Meat and Livestock Commission (MLC) in Great Britain. What do you mean by that? What aspects of the MLC procedure could the LMC adopt in order to improve the service?
Mr Duffy: There is definitely a problem in England surrounding the grading of cattle. England has a tighter form of grading than Northern Ireland. Hence, when the quality in the bands is compared directly, it is more advantageous to bone an R3-graded animal in England than in Northern Ireland. As the Chief Executive said, the difference is that the benefit swings towards the producer in Northern Ireland. The facts are there to bear that out.
Mr Douglas: Should the grading in Northern Ireland be in line with that in Great Britain?
Mr Duffy: Yes, but it will be harder on the farmer.
Mr Paisley Jnr: I have sympathy with Mr Moore. He said that it is very easy to oppose the LMC and to give it a good kicking, but it will be very difficult to put something in its place. We have already seen as much in the evidence that we have received from other organisations, and we are examining that.
Mr Mathers rightly said that illegal sheep movements are causing a great number of problems. It would be helpful to any future assessment of foot-and- mouth disease if NIMEA could produce the paper trail to establish the warnings that it gave to the Department of Agriculture and Rural Development, the Ministry of Agriculture, Fisheries and Food (MAFF), the Irish Republic and other organisations, well in advance of foot-and-mouth, about how illegal sheep movements could spread the disease. We are often told that hindsight is a wonderful thing. If you can produce evidence of foresight, that will be most welcome. It may open some people's eyes about the situation and give us the opportunity to ask different questions.
Classification is causing problems for many people. Should the LMC look at finding alternative methods of classification, and should Government money be directed to that? Moy Park has developed an electronic classification scheme in the poultry sector that is speedy, efficient and cost-effective. Is there room for development there? What progress should the Government make to put in place such an efficiency drive?
Secondly, do you agree that the figure of 20% wrong classifications is astounding, even though it is a European regulation? Do you agree that that should be reduced to, at most, 5%? If you had an electronic classification scheme, would you agree that you could get down to a 5% inaccuracy level? Would there be any benefit in carrying out a classification on the hoof and a classification on the hook, and then coming up with an overall classification? Would that result in a more accurate classification? Finally, do the producer, processor, retailer and consumer get value for money from the work done by the LMC?
Mr Duffy: The LMC should forge ahead with developing an electronic grading system, and it should form a strategic partnership with an organisation that is pioneering and doing a lot of work in that field. It would be almost impossible for the LMC to independently fund it, but it would be beneficial if the industry got together on that issue. However, a lot of work is being done and phase one is up and running.
A number of countries and organisations are spending a lot of money in that area, and it would be good if the LMC formed a strategic partnership with them. Funds will be required to obtain the latest technology, and NIMEA would be willing to operate those trials in its plants.
Mr Mathers: As far as I know, I am the only person outside the Department of Agriculture and Rural Development and the LMC who has ever held a classification licence. Since 1990 I have been the only person on the island of Ireland, as far as I am aware, who is a registered meat surveyor with the international meat trade.
As I have an interest in the automation of carcass classification, I went to Spain last year to follow it up and to see what is going on there. Carcasses of sheep, pigs and poultry are pea-in-a-pod carcasses. They have similar size and weight, et cetera. However, cattle have carcasses ranging from 190kg to 450kg and there is no classification equipment more accurate than the human eye.
Mr Paisley Jnr: Is that to do with bone density?
Mr Mathers: It is to do with everything, because the carcasses of beef animals are so diverse.
Mr Paisley Jnr: I understand from Moy Park that its X-ray machines give bone density and fat content and that classification can be deduced from a photograph. However, I know that comparing poultry to beef animals is like chalk and cheese.
Mr Mathers: You are talking about a 2 sq ft photograph compared to something that is 8 ft or 9 ft long and 3 ft wide.
Mr Moore: The genetic diversity of a beef herd is as great as that in the human population. The genetic diversity in pigs or poultry is minuscule.
Mr Mathers: The European report on mechanical classification stated that none of these machines would be likely to meet the proposed criteria for authorisation of mechanical systems by the EU. All the machines can classify, but none more accurately than the human eye. In a few years' time there will be more accurate machinery. Technology will advance and allow for that. When that happens, there will be nobody happier than the meat industry in Northern Ireland.
About 90-92% of all cattle fall into a box on the grid without any dispute. The remaining 7-8% are borderline cases. They have two or three points that would recommend them for a higher grade, but they also have two or three points that would pull them into the lower grade. That is where the classification skill comes in. The error rate is 20% of that 7-8%; it does not refer to 20% of all cattle graded.
Mr Moore: I have no problem saying that the LMC provides value for money. We have dealt with other promotional bodies in other countries at times. Going back to the original point, I am basing my judgement on the customer's opinion of the independence, integrity and the foresight of the LMC. I am not basing my judgement on my own opinion. I have seen the response of customers. We should send them out on their own to certain markets. In many cases, the LMC's foresight in developing and sticking with the farm quality assurance scheme without farmer support has been instrumental in winning a return that would be less today. I have no problem in saying that it currently stacks up well against any other international body. That is the opinion of some of the most significant customers of the industry. A service is being provided.
Mr Tweedie: I will not say that the LMC gives 100% value for money, because no one does. I do not know whether the £2·4 million going in to the organisation goes out again, or whether they should have nine instead of 10 members - that is an internal thing. I know that underfunding has created a few problems. In the South of Ireland, a lot more money goes toward the promotional fund. Approximately £2·30 per share goes into the Meat & Livestock Commission (MLC) promotional fund in England, and in the South of Ireland it is over £1. We have more money.
We supply meat to supermarkets. About two years ago we were giving them a lot of mince. Then they said that they would not be buying any of our mince for two weeks. Why was that? Was it to do with our prices? They said "Yes, but MLC is giving special promotions, therefore we have to sell all the meat from the mainland." I had a big problem with that. We had to put up the money out of our own pocket and pay that funding. That was because the MLC had more funding. It is hard for supermarkets to give value for money if they do not have the money to spend.
The money put into promotional funding in the Republic and in GB is much greater than in Northern Ireland. As Mr Mathers said, we need a pointer. The funding should be put into one pot so that supermarkets can promote our goods and make us strong. In recent years we have been tied in with MLC, and probably half a million of that £2·4 million that comes in goes out every year to the MLC. Therefore, we are now part of the promotional work in the mainland, into which much of our business goes.
The LMC loses a lot of levies through those half a million sheep that are being smuggled every year. I do not believe that they have been smuggled because of a lack of money, as Mr McHugh said. They are being smuggled because of a VAT and levy advantage. We have had a bucket here, and that bucket has had a hole in it for several years. Half a million sheep have been pouring out of that bucket into the South of Ireland.
In the past we have not had enough lambs to supply to our customers in Northern Ireland, and therefore we have brought lambs out of England into Northern Ireland. That smuggling has caused foot-and- mouth disease (FMD). If those lambs had not been smuggled down South, we would have had enough raw material to avoid having to bring lambs out of England. Sometimes we learn lessons out of a disaster, and the lesson should be learned that because of FMD, we can now stop sheep moving, but we could not stop half a million sheep moving when there was a financial advantage to those smugglers.
We can sell those half a million sheep. At the moment, the price of lambs in Northern Ireland is less than that on the mainland. That is because we have half a million lambs on the market that are no longer going elsewhere. We can market those lambs and level our price up to that of GB. The lambs have not been there for two years - they have been smuggled because of VAT and unpaid levies.
The Deputy Chairperson: I take your point. Mr Mathers said earlier that the LMC, the Department of Agriculture and Rural Development, LEDU and IDB need to come together and pool their ideas. That is long overdue, and needs to be done.
Mr Armstrong: You said that classification by human eye is most effective. Few of us classifying animals would have any qualms as to how to do it. There is always that 20% lean to the producer. Do you think that the price structure was leaned towards that possible 20% error rate?
Mr Mathers: I do not fully understand the question.
Mr Armstrong: When that 20% is leaned to the producer, the pricing structure for the meat plant could have been lowered to allow for that error in judgement of the stock.
Mr Duffy: I see what you are trying to insinuate. In terms of grading, I have said before that not enough is being paid at the upper end of the scale and too much is being paid at the lower end of the scale. Those farmers who actually engage in quality production in a serious fashion are not being appropriately rewarded. The brown envelope is in no way related to quality.
Should the price paid by the meat plants reflect the fact that the grading is in favour of the farmers? The meat plants basically pay what they can afford to pay, depending on the customers. It is an average price. It ranges from £1·70 to as low as £1·30, but it is an average price every week. That is the way it works.
The differential is not directly related to the quality of the animal. I said that last week. If we could have an objective classification system, based on yield, that would take into account the prime parts of the animal - obviously a fillet or a loin has a much higher value - then it would be a lot easier for everyone concerned.
Mr Armstrong: What can we do to promote that idea?
Mr Duffy: As Mr Paisley Jnr said earlier, the LMC needs to forge strategic links with one or two of the bodies that are advanced in the science of objective classification. That would be money well spent. If the industry got together and decided to bring these machines into Northern Ireland on a trial basis, that would be a positive step. When this comes in, there will be a lot of doubt. People will look at the machine and say, "This is not what I want. I want what I had last week." A trial run of a year or so in conjunction with a major institution from another country would be a major advantage for Northern Ireland.
Mr Armstrong: Would these machines come in and take the place of some of the graders in the long term? Would there be any extra expense to the farmer?
Mr Duffy: Yes, the graders would be replaced. In fact, there would be a saving.
Mr Kane: Mr Duffy, is it not the case that you are a member of the board of the LMC? How seriously are we to take any opinions that you might express to this inquiry? Are you not prejudiced in favour of the LMC? Is that not the case? Come clean.
Mr Duffy: It is not the case. That is the simple answer.
Mr Kane: That is not an answer at all. Come clean with us. Tell us.
Mr Duffy: I have answered your question. You asked whether I was prejudiced and I said that I was not.
Mr Moore: The Committee should be aware that both Mr Tweedie and I are former members of the LMC board. The membership of that board is not written in stone; it rotates to represent the entire industry. The intimacy of that relationship is a strength, not a weakness.
Mr Kane: A lot of fingers in a lot of pies, gentlemen.
Mr Duffy: Did you ask Mr McCoy of the Northern Ireland Agricultural Producers' Association (NIAPA) the same question?
Mr Kane: I did not get a chance to ask Mr McCoy that question.
Mr Duffy: The answer to your question is simply "No".
Mr Kane: Mr Mathers, you were once a grader. Is there a natural progression through the ranks from grader to the top of the tree among the processors?
Mr Mathers: Come again?
Mr Kane: Are you not among the processors?
Mr Tweedie: I can answer that question -
Mr Kane: With all due respect to you, I put the question to Mr Mathers.
Mr Mathers: When I was a grader, I was not working for the processors. I was a civil servant.
Mr Kane: Is that your answer?
Mr Mathers: Yes.
The Deputy Chairperson: In the opening paragraph of your submission, you say that you support the core funding of the LMC by the Government, but in the second paragraph you say that the LMC should remain independent of Government subsidy. Can you explain what you mean by these apparently contradictory statements?
Mr Mathers: What we are saying there is that you seem to be under a misapprehension. In his letter to us, Dr Paisley said that the Government were funding the LMC, but that is not the case. There is an opportunity to introduce that, and it should be given serious consideration in the light of what is done in the regions that we are competing against.
The Deputy Chairperson: You also say that those people who have the industrial and business experience essential to the successful operation of the Commission would not apply for such positions. Can you explain further what you mean by that?
Mr Mathers: The thinking behind that is that currently, when there is a vacancy on the LMC board, anyone can apply. The people that we believe should be on the board are people who have experience of industry - captains of industry - who understand the international marketing arena. Those people do not apply for those sorts of positions. It is just not in their nature. They operate in a different realm. They do not apply, and the people who are likely to apply are people who do not have the skills that are required, unless someone takes a suitable candidate and twists his or her arm.
The Deputy Chairperson: You also say that the Nolan principles contribute to mediocrity in appointments. Assuming that the Nolan principles will continue to be the guiding principles for appointments to the LMC, how can people of the calibre and experience that you feel are required be encouraged to apply? Who would you like to see on your board in order to make it more compatible with the present situation?
Mr Mathers: Our point is that we do not want to end up with a board of mediocre people who are not au fait with the professional marketing requirements of today's industry. We are stuck with the Nolan principles as far as public appointments are concerned at the moment, but in our opinion those principles are prejudicial to the real top professional people that we need on the board of the LMC.
The Deputy Chairperson: Elected representatives get questions fired at them left, right and centre. When the thing is going well we are never approached, but when we start to hit the wall, that is when the muck starts to fly, if I can put it that way. Quite a lot of meat is imported into Northern Ireland from the South. I often hear that it is being brought in for one purpose, and that is to keep prices down. Is that the case? Is that meat of the same quality as our own produce, or is it of a better quality?
Mr Duffy: The retailers have allowed a greater percentage of Southern meat on their counters because of the foot-and-mouth crisis.
Two weeks ago we were out of the slaughtering arena. In order to ensure continuity of business, we had no choice but to bring in meat from the south in carcass form. It is an integral part of the farming sector for the producer, as well, that he takes store cattle from the western seaboard up into Northern Ireland. That has traditionally been the case. Some of the good feeders are actually suffering from that at the moment.
In my opinion, Southern meat does not have as good a conformation as the carcasses that are produced in Northern Ireland. From a quality perspective, it is in no way inferior in terms of what it has been fed, et cetera.
When the meat is taken in, it is labelled accordingly in the plant and on the supermarket shelves. During this week and next week, the percentage of Southern meat will quickly be reduced in order to take account of the slaughtering numbers that are coming on board at the moment.
The Deputy Chairperson: Something that is in the minds of many people is that all these imports that come in are labelled, "Packed and processed in Northern Ireland." When those boxes go out, the Department of Agriculture has to put a label on the bottom of the box. There is a responsibility there on the Department of Agriculture. We know what was happening with the stuff that was coming in from Germany that time. I am only going on the evidence that is given to me. The people who told me about this know what they are saying. It was going on to other factories in GB and being processed there as Northern Ireland beef. Have you any control over that?
Mr Duffy: Why do you, or any member of the Committee, not come to a meat plant and see for yourself? You have told me before about the work schedule of the Committee and I understand that you may not have the time. It is a pity that you cannot see it at first hand. There are so many labels going on boxes at the moment. We are the most regulated industry that I know of.
If meat comes from a plant in the Republic in carcass form, say EC 300, and comes into Newry, it will be labelled, "Slaughtered in EC 300. Processed in EC 9001." It then goes to a retail packing plant, where "Retail processed in plant number x." is added to the label. It must be done in batch form, so you have a batch number on the label as well. That is how the meat can be traced right back to the farm of origin.
The Deputy Chairperson: Even if it is German beef?
Mr Duffy: It is the exact same rule.
The Deputy Chairperson: I was not saying that is was German bulls.
Mr Duffy: Are you referring to a particular incident?
The Deputy Chairperson: I am referring to an incident that happened. I am only asking for information.
Mr Duffy: It is exactly the same. If it comes from Germany or from Italy, it will have the slaughter number appropriate to that plant.
Mr Kane: Mr Mathers, you said that skilled personnel must be appointed to the board. Do you have skilled personnel on your board at this moment?
Mr Mathers: I do not have a board.
Mr Kane: Do you not?
Mr Mathers: What board are you talking about?
Mr Kane: Forget about that question. It is not going to be answered anyway.
The Deputy Chairperson: There are a number of further questions that we would have liked to ask. If we send them on to you, will you respond to them?
Mr Duffy: Include Mr Kane's last question. We will endeavour to answer that for him.
The Deputy Chairperson: I remember when Mr Mathers was a grader. The set-up now is completely different. I do not mean any offence, but we have a job to do and we have advanced 30 years since then. We are in a different set-up altogether. Thank you very much.