Committee for
Agriculture and Rural Development

Friday 11 May 2001

MINUTES OF EVIDENCE

Inquiry into Certain Aspects of the
Livestock and Meat Commission

Members present:
Rev Dr Ian Paisley (Chairperson)
Mr Savage (Deputy Chairperson)
Mr Bradley
Mr Douglas
Mr Kane
Mr Molloy
Mr Paisley Jnr

Witnesses:
Mr H Marquess)
Mr J Carson) National Beef Association
Mr T O'Brien)

The Chairperson: Gentlemen, you have been with us before and we welcome you back to this meeting. Perhaps you would like to make a statement, and we will then ask questions.

Mr Marquess: I thank the Committee for allowing the National Beef Association (NBA) to take part in this debate on the Livestock and Meat Commission (LMC). Robert Foster, our chief executive, is unable to attend. He is meeting Nick Brown and Baroness Hayman this morning with an independent delegation on agriculture. It has put us out a bit because we would not be up to the same standard as him. Arthur McKevitt, our secretary, had an accident and is unable to attend. I apologise for them both. We will endeavour to put our case, but you must realise we are only farmers who have the welfare of our industry at heart. We feel humbled by this distinguished company surrounding us in this Committee for Agriculture and Rural Development.

Farmers cannot be expected to pay any more levies than at present, in their financial circumstances. The total levy depends on the meat plants, but 80p goes to the Livestock and Meat Commission (LMC) on levy and £1 goes to the LMC for grading, out of a total cost of approximately £16. Realistically, farmers would not be against higher levies if value for money were increased. Substantial funding, if needed, would have to come from the Department of Agriculture and Rural Development, processors or EU funding, to boost the £2.46 million required to run the LMC. Processors financing the LMC could pose a problem, as farmers may be obliged to pay for this by a drop in the price of cattle. We are all in this together, but farmers cannot afford to take another loss at the present time.

Northern Ireland is at a disadvantage to Great Britain in that costs are higher and returns are lower. The National Beef Association fears that if the meat plants put more money into the LMC funding, they will become more dictatorial. The LMC has a thankless job running the classification service. We believe that meat plants have an influence on graders. This is backed up by a report that classification is wrong in 20% of cases. In circumstances where farmers do not complain, this could possibly rise by another 10%. We never have complaints from farmers slaughtering cattle at small meat plants. There are no queries about grading, yet the same people are grading these animals to the same level as in the larger meat plants. Graders should be more responsible, putting their names to classification sheets and tickets on each animal.

Returning to the suggested wrong grades - in the range of 20-40% - if this were evident in any other practice, such as the health service, pay-offs would be the order of the day. There are different views on classification. If meat plants carry it out themselves, and it is not done properly, they would not acquire the cattle, as competition would be higher. The problem would be a price-fixing arrangement, as already suspected.

The LMC should hold more direct lines of correspondence with farmers - be transparent and listen to proposals. The LMC bulletin could cover the total grid of cattle at each meat plant, in this way playing the price structuring off one against the other. For example, if meat plant A, say, killed 60 U3s, 200 R3s, and 120 R4Ls, its price could be quoted, and it would be shown against other meat plants rather than just one quotation for all meat plants. Bonuses could also be shown. This could possibly force meat plants to put grades together in some circumstances, such as a U3 and a U4L, an R3 and R4L, and O3 and O+4L. Although this would mean a slight fall in profits for the processors, the meat eating quality could be taken into account.

The LMC should dissuade processors from aitchbone hanging, which results in the carcass being distorted. It then cannot be graded on appeal. The LMC and the Department of Agriculture and Rural Development should work together to show the realistic price of production. They should shame the meat plants into paying more to producers by publishing the loss margin to farmers in the bulletin. Farmers should not have to sell cattle at a price less than the cost of production, as is the case now. The LMC and the Food Standards Agency should assist in ensuring that imported meat comes up to the same standard of production and welfare that the farm quality assurance scheme requires of its members. As has been shown recently, free trade means free disease.

The LMC have to be complimented on the work that has been done through schools. The NBA would suggest funding be kept available for home-based production of red meat and lamb to combat the effects of BSE and foot-and-mouth disease, and also to combat the effects of a booklet by Dr Vernon Coleman, circulated to 6,000 schools, desecrating the meat industry and farmers.

Promotion of live auction marts should be ongoing, as either wittingly or unwittingly the LMC and the Department of Agriculture and Rural Development have promoted the meat plants until they have acquired a stranglehold on farmers. Meat plants need competition to raise the price of cattle to farmers. The Department of Agriculture and Rural Development has almost sounded the death knell for markets. Competition is always very evident in how Christmas fat stock sales boost the cattle prices, thus showing how much farmers need the live markets.

Promotion of exports in the short-term should not be a further cost to the farmer, but should be the responsibility of the processors. In the long-term, if prices rise producers may be more willing to contribute to export promotion. It would be beneficial if the LMC were to throw its weight behind the auction marts in their quest for compensation, as they are the only group that has been ordered to close by the Government.

Appointments to the board of the LMC do not include any full-time farmers. We suggest the appointment of four full-time farmers - not 'yes-men', four representatives from the Northern Ireland Meat Exporters' Association (NIMEA) and one independent chairman. The board needs at least 50% full-time farmers with a complete change after either one or two years. At present the board members are paid roughly £4,000 to £5,400 a year. There should be no salary for this job, just expenses and mileage. In this way only really interested parties with the interests of the industry at heart would apply. The Minister, who makes the final appointments, should be made more aware of this situation.

The NBA feels that its has been deliberately kept off both the red meat strategy group and, lately, the farm quality assurance standing committee. Although application has been made to both in the past, we do appreciate that the red meat strategy was instigated before the NBA was formed in Northern Ireland. It seems possible that the reason for NBA not being invited on to either of these groups indicates the cosy relationship existing among the present members.

The Chairperson: Gentlemen, I have to leave the meeting for a few minutes and my Deputy Chairman, Mr Savage, will be taking over. I had just one question, which you have answered. It related to the membership of the present system and you have answered that very fully. This is important because if we do not have a proper representative body to run this organisation, we are not going to see fair play. We need to put farmers on the board, people who are not 'yes-men'. I have wide experience in political life, and if you put a chain on a man's neck and give him a salary, he becomes somebody else's man. In the case of a quango, where it is the grace and favour of the Minister, there is a lot of 'keeping in' with the Minister. These people should only be reappointed for one term, after which their services should be terminated. They should not have security of tenure, which is important.

I will return to the meeting. Mr Savage will now take over.

The Deputy Chairperson: I listened to Mr Marquess cover these relevant points, and it is fair to say that unless farmers receive a fair return for their produce, then they are on a hiding to nothing. Your concern about an additional levy is that it will ultimately be passed on to the producer, and you referred specifically to the possibility of this occurring through the overall reduction in the price of prime cattle. What steps can be taken to ensure that the levy paid by the processors is not passed on to the producer?

Mr Carson: In Great Britain they are talking about us paying £35 - they pay roughly £70. It is not an argument in Great Britain because for some time they have been paid £70 more per animal than us. If we were getting value for money out of the LMC I would prefer to pay the £70 and not have the meat plants involved.

Mr Marquess: We will be in difficulties for as long as cattle remain in surplus. There will be problems until meat processors have to go out and look for cattle. Farmers have been dragged into the situation where they go to the meat plants rather than the auction marts. The problem arises if there is a surplus of cattle, and that is the crux of the matter. Supply and demand will rule the price.

Mr O'Brien: Meat plants have the monopoly, and are still using their wherewithal to find out what cattle are ready and what cattle are coming up to the 30-month limit - there is evidence of that. That area should be scrutinised.

Mr Carson: I do not know whether or not it is a good idea if a newspaper headline were to say that the NBA has suggested to this Committee that farmers should be asked for £70 rather than £35 at this time. As you know, farmers are living in a state of gloom, doom and despair. The beef industry has not been in a profit-making situation for the past four to five years - no other industry has suffered as much. This has been going on for four or five years, but other agriculture sectors have had their good and bad years in between. Therefore it is not acceptable to ask the farmer for £70 at this stage, but that is how the NBA would prefer it.

The Deputy Chairperson: Farmers do not mind paying the extra expense providing that they get a good return for the end product.

Mr Carson: It is a similar situation to the MLAs. The public does not mind the salaries MLAs receive providing that they are doing the required work. I do not care if their salaries are doubled so long as their work comes through to the agriculture industry.

The Deputy Chairperson: The processors are making a voluntary contribution to the promotion of meat products in Northern Ireland. Do you welcome that, and what other sources of income do you suggest in order to promote meat from Northern Ireland? Do you have any other ideas on how to promote Northern Ireland meat?

Mr Marquess: The Department of Agriculture and Rural Development will have to provide money and, if possible, the EU. The LMC acquired European money for the promotion of the export of beef. At present meat needs to be promoted at home.

The Deputy Chairperson: We have to encourage people to eat more meat - go back to their roast at the weekend.

Mr Molloy: You had mentioned a book circulating around schools. Who promoted that, and how did it get around schools?

Mr Marquess: I do not know. 'Farm Week' recently printed an excerpt from this book, which decimated the beef and farming industry. It called farmers "blackguards and slaughterers", and to be honest it was hate mail. I brought it up at an industry meeting and asked the Minister if she could get the LMC to combat it. She said the time was not right, but she would look at it in the future. I wanted to bring it to your attention. It was just hate mail, and if I wrote the same sort of material as Dr Vernon Coleman I would be in the High Court. I cannot understand why no one has taken him to task.

The Deputy Chairperson: We have to encourage our young people in the schools to start eating meat, because our meat is the best quality in Europe. This sort of propaganda does not do the industry any good.

Mr Kane: Do your complaints about classifications stem from perceived inconsistency in grading, the complexity of the classification grid or the generous level of mistakes that LMC are allowed to make? Also, what are your opinions, as a farmer's organisation, on the practice of aitchboning?

Mr Marquess: This is when a side of beef is hung through the aitchbone instead of straight down by the ankle - the carcass is doubled over. This must be done when the beef is fresh, and it is the supermarkets and the processors who are trying to go down this line. Someone across the water carried out a survey for LMC, which said that this process enhances the tenderness of the beef. As a butcher for 30 years I totally disagree with that. It distorts the texture of the beef, and just allows fresh beef to go into the supermarkets sooner. A butcher would hang the hindquarter of a beast for three weeks. It does not help the industry by sending fresh beef into a supermarket.

As soon as possible after grading the beast is taken and hung by the aitchbone on the hook. This distorts the whole carcass - it is hanging over instead of straight up. If you have an appeal on a grading problem, you cannot go back to that beast again to appeal it because the shape of it is distorted - they will tell you your appeal is over-ruled.

Mr Kane: Is that what is behind the whole issue?

Mr Marquess: That is correct. It is to get another catch on farmers, to put it in layman's terms. They can downgrade your beast and once it is aitchbone hung you have absolutely no way of getting that beast upgraded again.

The Deputy Chairperson: Do farmers have any comeback?

Mr Marquess: Farmers have no comeback - absolutely none.

Mr Kane: What about the classification and consistency in the grading?

Mr Marquess: The classification is good enough, but the people who carry it out are not coming up to the required standards. They would always have it in the back of their mind that a meat plant manager is looking over their shoulder, because managers would like a beast down graded so that they pay the farmers 6p less on the grade.

When that happens, it should be brought to the attention of the LMC, and a senior representative should be sent out to check that beast. However, in many cases farmers do not follow their cattle through, and they often do not find out about a bad grade until they get their docket two days later. Farmers should be on site to see their cattle graded, but processors do not encourage that.

Mr Kane: Why does your organisation seem more dissatisfied with the LMC than other mainstream farmers' groups who have given submissions to the inquiry?

Mr Marquess: I do not think that we have damned the LMC. We are trying to encourage them to make some changes. The crux of the matter is that there should be four full time farmer members in the LMC. The LMC should also ensure that the meat plants cannot organise a fixed price. It is very obvious to me that prices have been fixed. I have been surprised by the attitude of the Minister, the permanent secretary, and everyone that we have contacted to look into the issue - there is a relationship there that does not want to be kicked. That is the plainest way that I can answer the question.

Mr Carson: People seem to have got the wrong end of the stick - we are not against the LMC. Farmers should look upon the LMC as their organisation - their headquarters. Farmers should be encouraged to use rather than abuse the LMC. Every time farmers have a complaint, they should get on the phone and make an appointment to see them. The LMC are employed to serve the farmers as well as the rest of the meat industry. In some instances farmers are to blame for not contacting the LMC. They should be on the doorstep and on the phone, and they should look upon the LMC's headquarters as the headquarters of the beef and sheep industry as well. I would encourage farmers to use the LMC - it is a good organisation because the men in charge of it and the men who work in it come from a farming background and know a lot about farming. However, the LMC needs to be dictated to and pressurised by farmers.

Mr Douglas: You said that the LMC should publish grades for each plant. Have you ever asked for that to be done, and do you think it is attainable?

Mr Marquess: I do not see any reason why that should not be attainable because there are so few plants in Northern Ireland. It would be a different matter across the water where they have about 70 or 80 plants - in Northern Ireland we would only need to cover five plants. The LMC might be loath to take on the job, but they might do it if this Committee put them under pressure. It would be a good way of comparing plants.

Mr Douglas: I thought there might be unfair competition because there are so few plants. However, I suppose you want to encourage competition. Perhaps we would then be able to clarify the situation and have a closer relationship regarding the grades.

Mr O'Brien: A factory in my area, ABP Newry, actively discourages people from following their cattle around in order to see them graded. My son was in a factory last Thursday or Friday and was more or less told to go home by the people from the meat plant and the graders. Nobody wanted him around the place. This should be highlighted. The LMC is doing a good job but it is not very helpful in that sort of instance. On our farm we do not have a lot of beef animals so I would not be there very often. This was my son's only visit there in the past year and that was how he was treated. He was as much as told to get the hell out of the way.

Mr Carson: Farmers are not good at marketing themselves. I am a farmer and at the market I hear farmers asking each other if they have got rid of their cattle or sheep. The priority is on getting the animals out of the way rather than marketing them. Farmers will have to start to market their product coming off the farm.

The Deputy Chairperson: Mr Carson has made a valid point. The cattle produced in Northern Ireland can compete with anywhere else, but marketing is our weakness. We have to get to grips with that or the farmer will lose out.

Mr Molloy: My question relates to the perceived relationship between the LMC and the processors, which is as it is because of the controversy over the classification and the low price. Will that be made worse because the marts are closed due to the foot-and-mouth outbreak? As a result of those closures, is there any likelihood that the processors will become the only outlet?

Mr Marquess: About three weeks ago I spoke to a man who had put cattle into a meat plant. He phoned the meat plant for his grades because they did not want him to come into the plant. He tried to get an appeal done on his cattle. He was told that if he wanted an appeal, he could come and take his cattle away. He had six cattle put into the abattoir and he did not know what to do. He said that the meat plant would not take his cattle if he kicked up any more of a tirade. I told him that I would phone the meat plant and see what I could do - I was told the same.

The live auction marts need to be actively engaged again. I understand that due to the present situation that cannot happen. When they do reopen they will have to be actively used, which they have not been. There used to be 4,000 or 5,000 cattle at the markets around the country. Nowadays you can count on two hands the remaining markets, and the cattle numbers have also decreased. That is not because the cattle are not there, it is because they are not being marketed properly. It all goes back to the same thing; there is an over supply and that leaves things open to manipulation.

Mr Bradley: Over a couple of Committee sessions I tried to establish how many selling-on grades the meat plants have when selling off their product. I got longwinded answers, but I never got a satisfactory answer. What benefit would there be to reducing the number of grades, and who would benefit if they were reduced?

Mr Marquess: It all goes back to supply and demand. If there is surplus cattle the grades can be manipulated. I would like to see a bonus for the top grades. We are trying to promote good quality cattle, so there needs to be a bonus for those grades. The problem is getting the meat plants to give that proposed bonus. If there was a realistic price structure on what it costs to produce an animal - and the LMC could do that - the meat plants not offering the production price could be named and shamed. I think that would be a big help.

Mr Carson: It is with regard to the R3 and R4L grades that we are asking for a 6p differential. In some cases we are actually paying the same, if not more, for the R4L grade. That grade seems to be the problem one.

Another problem is that many people believe that the NBA is against meat plants and NIMEA, - everyone except the farmer, which is far from the truth. We need everybody playing their part in the game. Problems occur when a farmer sells an animal for £500, and within two weeks the value of that animal has doubled. The farmer has kept that animal for two and a half years and within two and a half weeks its value doubles. The cake is not being divided up properly, and that is hard to accept. Farmers are taking swipes at the LMC and at meat plants. Everyone needs to sit at the table and sort this matter out once and for all. The cake is big enough, and farmers should get more than just the crumbs.

Mr Bradley: I presented evidence to the Committee regarding prices. There were eight cattle sold in a factory in Scotland, and through the Assembly research department I discovered the price that those cattle would have made had they been sold on the same day in Northern Ireland. The result was an average of £65 less than in Scotland.

Mr Marquess: Some members of our group took cattle across to Scotland at one stage because prices were so low here. It worked well for about three weeks, and then prices started to come down slightly in Scotland and began to rise here. I do not know if the situation was manipulated or whether it just happened. However, within three weeks the exercise had to stop because it was no longer cost effective.

The Deputy Chairperson: You suggest that the LMC be divested of its classification responsibilities and the service offered for private tender. While the subjectivity of the classification process is indicative of transferring the problem somewhere else, why should the potential for bias in classification be any less with a private organisation as opposed to a non-Government public body? You have suggested that such an organisation would be paid for by the factories, so is it not likely that the relationship between the factory and the classifier would be perceived as being less independent than it is at present? For me as a farmer, what benefit would there be in a private body taking over the LMC responsibilities?

Mr Marquess: The only problem is that the graders would get into the same position as the present LMC graders. They need to be held responsible for their actions. If someone worked in a café and slipped up on health regulations, then he would be held responsible. Our suggestion that graders' names be put on the carcass classification would make them more responsible.

The Deputy Chairperson: Years ago at the beef sale in Portadown, I saw you, and people like you, coming in to buy your cattle for the Christmas market. Your eye was your judge, and you bought what you wanted - both you and the seller were satisfied. Is there no way that we can get back to that system again? About three months before the foot-and-mouth crisis, cattle were getting scarce and factories needed them for export orders. Their agents were coming round the farmyards - I know this for a fact, because they were in my farmyard. It was so much per kilo for the animals - no grade, no nothing. Is that is a fair system?

Mr Marquess: If the processors are forced in to the situation where they have to buy cattle, they will go out and pay more. They will not do it unless they are forced in to that situation.

The Deputy Chairperson: Are we back to a situation of supply and demand?

Mr O'Brien: We need the auction marts back as soon as possible. We know it is not practical at the moment, but someone has suggested that they could be open in September or October. If we get rid of foot- and-mouth, marts should be allowed to open far sooner than that. People should be encouraged to go to the marts and this Committee, which is doing a good job, should encourage that. Factories can dictate their own terms and you have no say. You can go out with your cattle today, if you want to sell them, and the plant can tell you that the price will be 156 or 158 pence. If you could go to the mart, other people may buy them there. The factories are going to have to pay more money.

The Deputy Chairperson: As far as I am concerned, it is a good opportunity to test the market.

Mr O'Brien: If these markets are re-opened within the next week or two, how do people know what value their store cattle are? There is no guideline and dealers will go for the lowest price. Farmers want money now - they need money - and that is something that should be pointed out. The marts should be opened as soon as possible.

Mr Carson: We need to encourage consumers to put their hand on their heart, before putting it in their pocket, and encourage them to buy produce from Northern Ireland. We need to get that across, and also do something about imports. I do not know what amount of beef is used in restaurants and such places, but it is said that there is a lot. They should be buying produce from Great Britain and Northern Ireland.

The Deputy Chairperson: That is an area that certainly needs to be investigated.

Mr O'Brien: Labelling has been talked about quite a bit. There is one particular place that I have been told about, where beef is packed. It is packaged in Northern Ireland, but it comes from Germany and elsewhere. That should be made clear - "Packaged in Northern Ireland" tells you nothing.

The Deputy Chairperson: There should be more use made of our traceability.

Mr O'Brien: Definitely so.

The Deputy Chairperson: In order to balance the subjectivity of the classification procedure, there is an appeals procedure. This appeal is made to a senior classifier employed by the LMC. In your opinion, does this reflect a truly independent assessment?

Mr Marquess: It is according to the senior member. I know quite a few cases where farmers have had their appeal upheld. I know of some occasions when it has not happened. If you put too much pressure on the meat plants, they do not need your cattle the following week. They leave you until your cattle are perhaps coming to 30 months of age. They have ways and means of manipulating you - to keep you waiting on the sidelines. They just do not need cattle this week. There are so few of them, all they have to do is lift the phone and say "Harry Marquess has ten cattle, do not take them this week. Hold them back a couple of weeks, and we will fix him". You are so glad to get rid of them at the end.

The Deputy Chairperson: Whenever you are down to five, it is a serious situation. The final question that I want to ask is what would you like to see happening to make the LMC more streamlined for the farmer and yourselves. What changes would you like to see being made?

Mr Marquess: This comes back to appointments. If full-time farmers were on the body of the LMC, they would have the opportunity to make changes, and they could force change if they were prepared to do so. They do not need to be "yes men". I can think of half a dozen men that could be put onto it tomorrow, and they would straighten things out.

Mr Carson: At the same time everything that the LMC does is not wrong. If you get the name of rising early, you can lie all day. LMC does a lot of work, and has done so in the past. It did a good job on the promotion of beef to Europe before BSE. Perhaps it could have done more to try and sell beef in mainland Britain. We would criticise it for that, but on the whole, it needs to be used rather than abused - we cannot do without the organisation.

The Deputy Chairperson: If farmers have complaints they have got to go to the LMC and make it aware of them.

Mr Marquess: That is the reason that we put our submission forward to you - we hope that you can impress that on the LMC, because the farmer cannot impress upon it any more. We have done all that we can. In certain circumstances, the LMC members are not prepared to listen, but if a body such as yourselves approached them and said that you are breathing down the back of their necks, that would be an entirely different story. I am sure that if they saw Dr Paisley breathing down the back of their necks, they would sharpen themselves up a bit.

The Chairperson: I do not know about that. When you are dealing with quangos, you always have the motivation of self-preservation. The LMC members know that they are not going to preserve themselves because they have friends on the Agriculture and Rural Development Committee. They are going to possess their position and keep it as long as they have the patronage of the Minister and the Department. I never in all my days met any quango with a degree of independence. Often you cannot even get elected Members of Parliament to be independent, and they must go to the electorate. I can pick a number of names out of a hat and, by patronage, put them into such a position - they will not bite the hand that fed them. The trouble is that they are biting the hand of those that do feed them - the farmers.

There is one question that I would like to ask. Perhaps it has already been covered, but it disturbs me. It concerns the system of classification, whereby a man looks at an animal and he decides its well-being, its value and where it should be placed as far as money is concerned. Can that be altered?

Mr Marquess: There is electronic classification, which is presently being worked on. It was subject to some discussion, and has been tried out in the Republic of Ireland. The classification was good but it did not come up to the right fat cover. It is in the advanced stages and perhaps in a short time it may come about. I still think a good man is equal to any machine providing that he is straight and does not respond to a meat plant manager looking over his shoulder.

The Chairperson: The LMC has told us that graders are allowed a 20% error in everything that they grade. I asked them if they would employ someone permanently and allow them a 20% error - they said "certainly not". I could understand 5%, but they are working on a system of 20%. They then hide behind the European mask, saying it is European law. I would query whether it is European law. They do not have to abide by it - it is only a guideline from Europe and not a law. A 20% mistake is too much.

Mr Marquess: It is too much.

The Chairperson: Would you like your employees to regularly make so many mistakes?

Mr Marquess: I would not.

The Chairperson: It always favours everybody except the farmer. They tried to tell us that the farmers were quite happy about that.

Mr O'Brien: They are admitting 20%, but what is the actual figure? It could be 40%.

The Chairperson: I cannot get that information because there is no way to measure up every cow afterwards. In my opinion it is a system that cannot be monitored. How can you monitor that system, and at least get fair play? At the very most you should have a 5% error rate, but 20% - a fifth - is too much. That was the most revealing information to come out of their examination. The LMC try to say that the farmers like the system. They were trying to evangelise our poor heathen souls to believe that the farmers all agreed with it, while the farmers raise this matter everywhere my colleagues and I go. No one has ever come to us endorsing the system of classification.

Mr Carson: You will have made farmers more unhappy, as I did not realise that they were allowed 20%.

The Chairperson: Neither did we until we found out.

Mr Carson: LMC say that they are taking their guidelines on grading from the Department. Would the Department be making the balls, and letting LMC throw them? Some graders want to keep on the right side, rather than lose their job. That is a matter that should be investigated.

The Chairperson: They ran to Europe for cover. It is a guideline in Europe, not a law, and I am looking into the matter. A lot of European legislation is guidelines-[inaudible]

When you take the price he has paid for that commodity, and the price of feeding stuffs, et cetera, it is amazing.

We may want to send you some written questions in the near future. Thank you very much for attending.

MINUTES OF EVIDENCE

Friday 11 May 2001

Members present:

Rev Dr Ian Paisley (Chairperson)
Mr Savage (Deputy Chairperson)
Mr Bradley
Mr Douglas
Mr Kane
Mr Molloy

Witnesses:

Mr E Adamson)
Mr I Gibson) National Sheep Association
Mr S Wharry)

The Chairperson: I welcome you here today, gentleman. If you would like to give a summary of your evidence, the Committee will then have some questions.

Mr Adamson: I am Edward Adamson, secretary of the National Sheep Association. Ian Gibson is the chairman and Samuel Wharry is the treasurer. The National Sheep Association does not lobby as much as the National Beef Association. We try to advise sheep farmers on technical matters. There are other people out there to do the lobbying for them. We never really get involved much in lobbying.

Classification in the lamb trade is slightly different than for other animals. There are grumbles about it, but perhaps not quite as many as there might be - it is a different animal and is graded in a different way. The grumble is mostly that in the South standards are much less severe than here. A lamb in the South would be a grade higher than it would be here. I have witnessed this, and there is no argument about it.

The Chairperson: What is the reason for that?

Mr Adamson: I do not know. It should not be that way because the Livestock and Meat Commission (LMC) is an independent body here. In the South the graders are paid by the meat plants. Suspicious farmers might think that if a meat plant is paying a grader, the sheep would be given a low grade so that the meat plant would not have to pay as much for them. Perhaps they think that if a lamb is given a higher grade it can be sold more easily. There is definitely a difference.

The Chairperson: We have found that such differences occur throughout the South. The bias is towards the farmer there.

Mr Adamson: Yes, it is.

The Chairperson: We have had evidence of that from all sections.

Mr Adamson: My other main point is about farmer representation on the LMC board. If farm producers like ourselves are funding the LMC we ought to have a say in it. We would not want all the say, but I think we should have more say than we currently have. There are what I call "part-time farmers" on the board, but there are no full-time farmers depending on farming as their only income.

The Chairperson: They refuted that. They said there was one or two.

Mr Kane: They are only part-timers. I am sure they do other things.

Mr Adamson: Yes, I am sure that they have to spend time on the other matters that they are involved in. Their income from those matters is probably more than that from their sheep enterprises.

Mr Kane: They have a lot of fingers in the pie.

The Chairperson: Are you ever consulted when they are appointing to the LMC board?

Mr Adamson: No. We are not consulted. When there is a space to be filled on the board it is advertised in the press. None of our members saw the last advertisement; I do not know where it was advertised.

Mr Gibson: The advertisements are usually in the 'Belfast Telegraph' on a Thursday. There would be a much higher chance of farmers applying for it if an advertisement was placed in 'Farming Life' or 'Farm Week'. Farmers are less likely to check the 'Belfast Telegraph' for advertisements.

Mr Wharry: The first time that farmers are aware that there is going to be an appointment to the board is after the appointment has been made. It is a fait accompli before we even know about it.

The Chairperson: It is probably the same with this Committee. Maybe we can get that rectified. The Department is totally opposed to appointing anyone who is a nominee from a body. It might write out and ask - which it does not do to you. It might ask the Ulster Farmers' Union; it might ask NIAPA. I do not know whether it told us that in evidence. The Department of Agriculture and Rural Development will do this on its own -it is a grace and favour matter. It is an appointment of the Minister, and we have no say on that.

Mr Gibson: Our main problem is that it is funded with farmers' money, and yet farmers have no say in the running of it.

The Chairperson: Fifty per cent of the commission should be full-time farmers, people whose main means of support is from farming. Then they would have an interest in protecting their own interests and those of the farming community.

They argue that they are all great businessmen and that they are getting you a good deal. I have never met a farmer yet who thought he was getting a good deal from them. I was thinking of writing to them and asking them if they could bring me some of their constituents who voted for it. They paint such a rosy picture. They should take me out and show me where these people are.

Mr Adamson: We are not totally against them. They are doing their best, but it could be better, and they could communicate better. They have a very bad communication system with farmers. If they had farmers on the board, it would help to improve their image.

Mr Gibson: Things might not be better, but it might look better.

Mr Adamson: You could bluff them better.

Mr Gibson: Yes, it would look better if there were, say, two beef farmers and a sheep farmer on it. I would suggest someone from a company like Moy Park, which is a world leader now in Northern Ireland in meat production and meat exports. Someone like that should have an outside input.

Moy Park itself was not going well. There was the directors' buy-out 10 or 12 years ago. Since then it has probably been the most successful agricultural company in Northern Ireland.

Mr Savage: Not if you are talking to the broiler producers at the minute.

Mr Adamson: The company itself has done well.

The Chairperson: If you want to get down to what root people are thinking, you have to have representatives of the grass roots. They were not in that body. That was the first time that any commission brought everybody, and they were all well-heeled gentlemen. I do not think the bank manager has had a personal talk with any of them for a long time.

Mr Adamson: Their salaries were in the published accounts. What the chief executive gets would pay quite a number of farmers.

The Chairperson: They would settle for it?

Mr Wharry: Most of us would settle for it quite happily.

Mr Gibson: The brochure produced every year is another gripe. I am sure it costs a fortune to produce that number of copies. In the middle there is an appendix of 10 glossy pages. The Department of Agriculture and Rural Development sends me all that information. You can get it anywhere - and it is all in the Ulster Farmers' Union diary. There are a lot of other things in it, and a lot of blank pages. A lot less would do. To be honest, it is all padding.

Mr Wharry: The complaint is that there is never enough money to fund promotional work, then that sort of money is spent on that. I know the argument would be that it is a small amount for promotion, but every little bit has to help.

Mr Gibson: I do not think even a political party could produce a brochure like that.

The Chairperson: Political parties are very poor beasts and always suffer from foot-and-mouth disease. You cannot get them to canvass or speak out.

I can only say that the feedback on classification has been fairly serious and fairly critical of the personnel who run the commission. I do not think there has been anybody who has been against them altogether, and quite a few people said that they did some good things. However, no one came in here carrying a flag for them. They were not eulogised in any way. There was a series of criticisms which, for their own sakes, they need to face up to, but I did not see a great willingness among them to do that. They did defend classification here, but then they hid behind Europe. They certainly defended the composition of the board, and I think that composition was very good.

Mr Kane: As far as I am concerned, the meat plants and the processors have them in the heart of their hands.

Mr Wharry: There is a feeling among farmers that the LMC is controlled by meat plants. LMC makes no effort to counter that.

Mr Savage: We note your suggestion that the broadening of levies away from the dead weight lambs to the number of ewes might be more fair across the lamb and sheep sector and would provide a broader basis for levy collection. Do you consider that such an extension would gain widespread support in the Northern Ireland sheep industry?

Mr Adamson: It would from those who sell dead weight because they already pay it. However, those who sell their lambs live - if that ever happens again - do not have to pay. According to human nature, they will not like it. The lamb levy would amount to £38,000 or £40,000, but we cannot expect a lot to be done for the sheep industry on that sort of money. Money is needed from somewhere, but it is hard to find, and we cannot afford it.

Mr Savage: Are things tight at the minute?

Mr Adamson: Yes. We are in big trouble this summer. We have nowhere else to go but the meat plants. We are at their mercy, and it would appear that they are going to pick our bones.

Mr Savage That is likely.

We note your concern that a statutory levy on processors may be indirectly passed on to the producers. What steps do you think should be taken to ensure that the producer is protected from this?

Mr Adamson: That is out of our hands. It would be a decision for people above us. When the processors have costs they automatically come back to the producer. There have been other costs in the past that we have had to pay, and this would just be another one.

Mr Savage: The cost to the producers would not be so bad if they were getting a good price in the first place. They could put up with that.

Mr Adamson: At the minute the percentage that is taken out of the lamb price is larger. If it were a smaller percentage we could cope with it.

Mr Wharry: That is why we feel that it would be better for the processors to be involved in promotional work along with LMC. Let them go for joint promotion or something like that, rather than charging on the basis of cost per lamb. If it is done on a cost per lamb basis, it will be passed directly back to the producers. There is no doubt about that. If they are spending money on promotion and joint ventures with the LMC, there is a chance that it will come out of a different budget.

The Chairperson: Following that point, you suggest that a levy should be collected on all ewes, rather than lambs at slaughter. The funds collected using your figures would only just top £100,000 at current levy rates. Is it possible to run any real promotional campaign with that amount of money?

Mr Adamson: No, not really. However, it is more than they were using, and it would have to be done in conjunction with the levies lifted on beef. We have to work in co-operation with beef producers.

Mr Bradley: I will comment on the appointments. Although we would all like to see four or five full-time farmers on the board - whether they produce sheep or beef - it might be impossible to achieve that. However, the LMC might have difficulty in keeping us from getting one or two farmers onto the board. We should keep that in mind for the future.

In your submission you raised issues about the branding of Northern Ireland lamb products. Can you describe the main issues and problems that you perceive with the branding in the Northern Ireland lamb sector?

Mr Adamson: Before the BSE crisis there was a Greenfields brand for beef, which was quite successful in Holland. One of the Dutch supermarkets, Albert Heijn, was buying Greenfields beef. If something similar could be developed to promote Ulster lamb, perhaps under the Greenfields label, those producers who use that stamp would then have to pay something for the privilege. Would that bring in money? However, there is a chicken-and-egg situation. You would have to prove that Ulster lamb was something special. There is a long-term problem there, but it worked for beef, and it could work for lamb. Would it not be possible for the producers or the promotional body to get some money to raise capital to promote it better? We hear about Scots lamb and Welsh lamb. Those brands seem to be doing well, but we do not have an Ulster lamb brand.

Mr Savage: We have got to promote our lamb.

Mr Adamson: Yes. It is not being done at the minute. The bulk of our lamb goes into the supermarkets' own-brand packaging.

Mr Wharry: A lot of supermarkets would be interested in having a branded product. The Ulster lamb groups who attended the SIAL food fair in Paris said that they got very positive feedback from the French supermarkets. They were keen to source lamb from here, which would be branded as Ulster lamb.

The Chairperson: I can confirm that. I went with the other MEPs to certain stores where French people were asking for Ulster meat. We were amazed when we stood at the counters, and they said that we should be labelling all our goods because we have a good name.

Mr Adamson: We have a good image and a good name which we need to try to build on and keep to the fore. The only way that can be done is with branded products.

The Chairperson: Would it not follow that the LMC should have endeavoured to achieve that long ago? Mr John Taylor was still a member of the European Parliament, and that is some time ago now. John Hume and I were amazed by what was said to us when we entered the store and the French women came up and asked for Ulster meat. That was not arranged. Ulster meat is very popular there.

Mr Adamson: We do not need to be humble about our products.

The Chairperson: The people said that Ulster meat tastes good.

Mr Adamson: Our product, both beef and lamb, is grass-fed, whereas French lamb is intensive house-fed, which is a totally different thing.

Mr Wharry: If you query the LMC on that programme it would tell you that it cannot afford the programme and has not got enough money.

The Chairperson: There has been a lot of money over the years. We are not asking the LMC to do it in three months. One would have thought that it would be concentrating where there is a need. We sold over £1 million worth of meat to Holland, and we lost that, although we are getting a bit of that market back. Having lost a market, it is hard to get that trade back again.

Mr Adamson: None of our present problems are helping the matter.

Mr Molloy: In the submission you state that we need better information with regard to grades. What are the specific problems that you have encountered in terms of the LMC's grading groups? What improvements would you recommend?

Mr Adamson: The problem would be one of reporting. We receive feedback that there is a percentage of Es, Us and RS and that there is 80% of 2s, 3s and 4s. When one slides those two together they do not match. It is not a case of E2s, E3s and E4s. The individual grades are E1, E2, E3 and E4. The grading would need to be split up more to make it more useful. It does not mean a lot at present. It is rounded up into big lumps. If it were to be split up we could then see where they matched each other, where the conformation grade and the fat levels were together. Sorry if I have not explained that too well.

Mr Wharry: If lambs are going to be tagged with individual numbers - [inaudible due to mobile phone]

Mr Adamson: It looks like individual tagging is going to be forced upon us, so we might as well make use of it.

The Chairperson: It is a very costly business.

Mr Wharry: If we have to do it we might as well get some benefit out of it.

The Chairperson: Is the farmer going to have to pay for that? The Department of Agriculture and Rural Development will not pay for it.

Mr Adamson: We cannot afford to pay for it.

Mr Wharry: It will lead to a contraction in the sheep flock - a lot of sheep farmers are going to say that it is not worth the hassle and get out of the business. That is happening already and this is just going to accelerate that process.

The Chairperson: What benefit is that to you if you do not hear the result?

Mr Wharry: That is what we say. If we have to do it, we have to get some benefit from it.

The Chairperson: The results will have to be some fresh financial help to farmers. What if the Department of Agriculture and Rural Development proceeds to tag three million sheep?

Mr Wharry: The current APHIS system is nearly at its limit, and that is a problem. How will the Department cope with that if three million sheep hit it?

The Chairperson: The Department of Agriculture and Rural Development wants to be the giant that holds us by the throat. That Department takes great exception to anybody putting legitimate arguments against it - everyone there is defensive. You touch them, and they immediately get back at you, even if you have made no charge against them. That Department is now going to establish a dictatorship over three million sheep. This is not the time to invest in the tagging of three million sheep.

Mr Adamson: That is right, and it will make a lot of sheep farmers break the law.

The Chairperson: When everything has been taken into consideration, it must cost approximately £1 to tag one sheep.

Mr Adamson: To tag correctly, you have to double tag. The cost of that, plus our paperwork, means that the cost would not be far short of that sum.

The Chairperson: That is £3 million out of our industry.

Mr Adamson: We are on £22 per week.

Mr Wharry: It will cause a lot of stress, especially for smaller sheep farmers, and probably older sheep farmers. They may say that it is not worth it.

The Chairperson: The overall policy of the Department of Agriculture and Rural Development is to put smaller people out of business, and if there is a way that it can do that, it will. I am worried about that, but the cost might prohibit the Department.

Mr Douglas: It was highlighted that there are two people on the LMC who are involved full-time in meat plants. There should be at least two from the farming community, with one from the sheep sector. That was highlighted, and it is important that we bear that in mind.

You mentioned that prices are slightly higher in the South and are graded to the benefit of the farmers. At the same time, it appears that a percentage of our lambs are slaughtered in the South. Whether that is legal or illegal is another matter. That fact is well known, and I know that a lot of lambs go to the South from my end of the country - I am talking about lorry loads that have gone. That points to the fact that the LMC's meat plants promotion is not doing its job properly. At the same time, we have to ask where we would be if we did not get rid of all those lambs.

Mr Wharry: We will find out in the summer.

Mr Douglas: A man in my area exports a lot of sheep to the South. People say that he does not give the best prices, but that he clears a lot of sheep - the market would be distorted if those sheep were not going.

Mr Adamson: Again that is not the answer - it is another question. Those lambs go to the South and the Southern plants are probably putting them into the same markets as the Northern plants.

Mr Douglas: They are then being sold on as lamb from the Republic, rather than from Ulster. That means that the promotion cannot be right.

Mr Adamson: That appears to be the case. Lamb production in the South is currently not near capacity. Northern meat plants are starting to have trouble coping with lamb numbers - we are only into spring, and there are few lambs there. Later in the season we will have full production, but that does not bear thinking about.

Mr Douglas: Are you saying that the lambs will go to the South?

Mr Adamson: I do not know where they will go, unless the plants here makes a better effort to get them into GB. The problem is that there are too many lambs [Inaudible due to mobile phone]

The press last week said that the chief executive of the NSA in England spoke to Meat New Zealand, and it has agreed not to target GB in its promotion to sell New Zealand lamb. That promotion will shift to Europe. However, I think that if a supermarket were to ask for New Zealand lamb, Meat New Zealand would probably supply it.

The Chairperson: Meat New Zealand can supply the lamb because it has succeeded in getting the name "New Zealand" into the housewife's mind. If you have the market, you do not need to target it. New Zealand has that market. It became an issue when we joined the EC. Roast lamb is a very big political hot potato. It was a big issue in New Zealand, and the company had to negotiate a special arrangement with the EC so that we could eat New Zealand lamb. New Zealand lamb was asked for - the housewife demanded it. That lamb was also at a good price. I ate New Zealand lamb as a boy.

Mr Adamson: We cannot compete pricewise with New Zealand lamb. However, you might notice a quality difference between the two.

The Chairperson: There is a definite difference between New Zealand lamb and the lamb that is brought up here. I do not know if any of you have been to New Zealand, but it is a different terrain.

Mr Bradley: Are they subsidised in New Zealand?

Mr Adamson: No. The point is that the operation is large. You could be talking about one man looking after 10,000 ewes.

Mr Wharry: It takes 8,000 to 10,000 ewes to justify one man's wages.

Mr Bradley: The point is the sheer numbers.

The Chairperson: There is a special arrangement for getting them in. There is no tariff.

Mr Adamson: That was an arrangement that was made.

Mr Wharry: Although Meat New Zealand is not subsidised, the New Zealand Government spend a great deal on promotion. The Government pay for all the promotion of New Zealand lamb.

Mr Bradley: There is a quality scheme in place there.

The Chairperson: Australia is the clearing place for New Zealand lamb outside that country. That ensures that it gets to Britain. That is why I said that they have already established a good system.

Mr Adamson: We have welfare codes in place, and there are standards which we have to keep to. If one man looks after 10,000 ewes, then I am afraid that there are no codes.

Mr Wharry: They use easy-care systems where during lambing time you leave them for three weeks.

The Chairperson: Did New Zealand ever have foot-and-mouth disease?

Mr Wharry: No. The import controls in New Zealand are stringent, and there are even controls on people coming into the country.

Mr Adamson: Sheep that are imported into New Zealand go onto an island for quarantine. The sheep that are eventually allowed into New Zealand are about three or four generations from that importation. Stock will not be directly imported into New Zealand - farmers only breed from what is there.

Mr Bradley: Is there no tagging in New Zealand?

Mr Adamson: No. I do not think so.

Mr Kane: Does the complex nature of the current classification grid lead to greater difficulty when making a determination?

Mr Adamson: It probably does. We commented that we could cut those classifications down. I mentioned that we were going to talk about four grades of lamb - a super lamb, premium lamb, the base lamb and penalty. We have the five European grades, and the five fat levels. If you multiply five by five you have 25 grades. Lambs are not sold like that. The EUROP system is only a guide to the meat yield. An E lamb will produce more meat than a P lamb.

Mr Gibson: The EUROP system was devised to standardise grading in Europe. We mentioned the size in the North; the system was meant to make an R3 the same shape of beast in France, Ireland, and England. There was to be a uniform classification system in Europe. It does not seem to be working.

Mr Adamson: They do not sell that number of grades.

Mr Wharry: It does not make sense because when a housewife goes to the supermarket to buy a lamb chop she does not ask whether it is an O3, an R3 or a U4L. The taste and the eating quality are more important. The grading system is more complicated than it needs to be. It should only be there as a guide to producers to see how their own stock is producing.

Mr Kane: Mr Chairman, all the points made by the National Sheep Association and the National Beef Association need to be taken into consideration, and the Committee must hammer them home to the Department.

The Chairperson: The classification system falls down because nobody benefits. The housewife does not say "I want a classification of that type of beef"; consumers do not know what they are buying. I would be in total ignorance if those grades were quoted to me. You said that valuable information is withheld from farmers, and they do not get the feedback that they should.

There are two questions that we must get an answer to. We note that you would welcome information on objective classification methods. What level of support should there be for a development of objective classification in the Northern Ireland sheep industry?

Mr Adamson: There would be plenty of support for it, but do you mean financial support?

The Chairperson: Would you say that people would be prepared to say, "Yes we should have this"?

Mr Adamson: How will the cost issue level out?

Mr Wharry: Would there not be a case for funds that are being modulated from sheep annual premium to go to rural development?

The Chairperson: Modulation funds?

Mr Wharry: Funds from the rural development budget could be used for that and for promotional work.

Mr Savage: You will see something along those lines.

Mr Wharry: That money is going out of the sheep industry, and we feel strongly that it should be spent on something that will benefit the sheep industry.

The Chairperson: The Minister promised us that at Westminster. Money that was taken from the farmer's pocket would be given back. Modulation was the great argument that was put. The Committee argued that you are taking money out of the farmer's pocket and saying that is a good thing. What benefit will the farmer have?

Mr Adamson: Our worry is that the money goes back to the pockets of rural dwellers but not necessarily the farmers' pockets.

The Chairperson: That worries the Committee too. There is the rural development craze; nobody ever defines what rural development or rural proofing is. The Committee cannot get definitions, and if it does not know what the terms mean it cannot help. What issues do you envisage a specialist sheep subcommittee dealing with specifically? Would local industry be prepared to support the work of such a committee?

Mr Adamson: That committee would deal with subjects that we mentioned earlier that are specific to sheep. The industry would initially support the committee to see how it was getting on; if it does not do the job the industry will soon pull the plug. The committee would have to produce the goods. It sounds good, but unless the committee is of use the industry would soon lose interest in it.

Mr Savage: The farmer must be given a decent return for what he has produced. We have not been getting that for the past three or four years. We must get the price stabilised. We are doing our best to promote the product, but it has to be promoted from both angles. This gentleman said today that he is trying for good quality lambs, but while there is no grading, it is very difficult to do that. There has to be a two-way effort here. The LMC and the Department must co-operate with the farmer and the producer.

The Chairperson: What you are really saying is that the place and priority of sheep goes to the wall because the commission is more interested in meat than it is in lamb. While it concentrates on that, the sheep just come in on the tail of the cattle.

Mr Adamson: When BSE first hit, we understood that there was a priority towards beef. We have got used to that now, but it should not forget about us. The beef industry is a bigger industry. However, the sheep industry cannot be neglected; there is no option in the hills other than sheep.

The Chairperson: I agree with you. I believe that it is all-important because there are people who will buy Ulster lamb. I told farmers years ago that they needed to watch the young people. They are very peculiar in their eating habits now. A terrible lot of young people do not eat meat now. There are young people who will not eat beef, because of BSE, and have not gone back to beef, but they eat lamb. If the commission is concentrating on meat, then the lamb goes to the side. That suggestion is a good suggestion, but there is nobody on the LMC board at present that is able to advise about sheep.

Mr Adamson: I suppose Ian Mark is involved with sheep, but the problem is that he has a foot in each camp. I know which one is the heavier.

Mr Douglas: Do you have representation throughout Northern Ireland? I know that you represent all Irish producers. There are eight regions, and you are just one, here in Northern Ireland. Do you have a fair representation?

Mr Adamson: We have representation throughout the Six Counties, but if I am honest, the sheep industry is focused more in Counties Antrim and Down. The membership runs parallel with sheep numbers.

Mr Douglas: What sort of membership do you have?

Mr Adamson: About 350.

Mr Douglas: That is a lot of members.

Mr Wharry: Whilst there are a lot of farmers who keep sheep who are not members of the National Sheep Association, for most of that 350, sheep would be an important part of their farming.

The Chairperson: Gentlemen, thank you very much. We will probably write to you and ask more questions. We will also send you a copy of these proceedings so that you can make any corrections.

4 May 2001 (part ii) / Menu / 15 June 2001