The Northern Ireland Assembly - Interim Report on the Inquiry into the 2001 Foot and Mouth Disease Outbreak in Northern Ireland

The Chairperson: I welcome Mr David Rutledge and Mr David Ritchie of the Livestock and Meat Commission (LMC). Perhaps you would like to make a short statement, after which we shall ask some questions.

91.

Mr Rutledge: We are happy to accept your invitation to contribute to your inquiry in any way we can. With regard to the finished livestock products from the beef- and sheepmeat sectors, the outbreak did not cause massive disruption to either industry. In the early days of the crisis there was disruption to the markets for both beef- and sheepmeat, but for beef that lasted only a matter of days. In the case of sheep, the disruption was more prolonged, and those producers marketing early lambs undoubtedly suffered a negative impact. However, only a small proportion of our lambs were brought to finish in the period before the export ban was lifted in early June 2002.

92.

From that time onwards, returns on finished lambs in Northern Ireland were at a record high. In anticipation of the ban being lifted, the LMC had a market development executive actively working in France, and the result was that, as soon as that happened, there were quite a number of customers waiting for Northern Ireland lamb.

93.

While those comments relate to an overall industry level, and looking at the year as a whole it could be argued that no serious economic damage was done, that would not properly reflect the undoubted hardship suffered in a number of areas. First, those farmers visited by the disease in Northern Ireland or Great Britain who were not responsible for its arrival on their farms through any illegal or unethical practices deserve the sympathy and support of all.

94.

Secondly, it is worth mentioning the livestock auction markets, whose businesses undoubtedly suffered a serious impact. It is appropriate to acknowledge that, to the knowledge of the LMC, there has not been any vehicle for mart compensation, other than perhaps some small relief on rates bills.

95.

It is also important to remind ourselves that the disruption to livestock auction marts and the ban on private sales and livestock movements had a significant effect on many farms. Some were left with surplus stock which they would have preferred to sell; others were left with a deficit of stock with which they would have planned to carry on their business and make a profit.

96.

We cannot give you any quantitative measurement of the impact of those latter matters other than to accept the logic of the assumption that most livestock farmers will have experienced some level of disruption. Those closest to the outbreaks clearly suffered the most direct impact. Livestock was slaughtered and taken from the farms by the Government in their effort to contain the disease.

97.

There is also a general perception that the impact of foot-and-mouth disease is past, but that is wrong because the market, particularly for beef, will be significantly affected for some time yet. I shall hand over to David Ritchie, who will give you a little more detail about the overall market effect and mention the lingering impact. Mr Ritchie is our economist and the person responsible for market statistics at the LMC.

98.

Mr Ritchie: As part of our written evidence we submitted graphs illustrating cattle and sheep prices over 2000-01. We shall examine the background to those before looking at 2002. With cattle, there was broadly speaking little change in prices in 2001 over the previous year. Over the year as a whole, there was an increase of only 1p per kilo, 156p per kilo being the average. There were fluctuations. In the first two or three weeks of the foot-and-mouth crisis very little slaughtering took place in Northern Ireland plants, and the industry ground to a standstill with an obvious market loss. We then had a month or two with a market gain because the market picked up owing to the initial cutback in Great Britain production. Afterwards the market settled down, and over the year there was little impact.

99.

Essentially, there was a shortfall — not a scarcity — of beef in Great Britain, mostly made up from increased supplies from the Republic, which had its own problems owing to BSE. The market was stable. Some felt it could have been better without foot-and-mouth disease, although our forecasts at the start of the year were that the year 2001 would be similar to 2000. In that sense, you could argue that there was no foot-and-mouth disease effect, and we believe that that was owing to a major British beef promotional campaign throughout the year. That isolated the Great Britain market — not from foot-and-mouth disease but from the European BSE crisis — and was a major factor in 2001.

100.

However, 2002 is a slightly different picture. The foot-and-mouth disease crisis is over, yet the aftermath is affecting the market. Cattle prices are so far similar to last year but with some fluctuations. We had a good start to the year, essentially because of a good Christmas trade, and stocks had to be replenished. Since March the market has been flat and disappointing, and there is no sign of its picking up. There is a twofold reason for that. First is the aftermath of foot-and-mouth disease. United Kingdom beef production in the year 2000 was over 700,000 tonnes, which has since fallen, and it is falling again this year. The forecast for 2003 is down to 550,000 tonnes as a result of the culls across the water.

101.

In the law of economics, scarcity normally leads to a stronger trade, but in this case it has not made up for that. The UK has always imported beef, but it is now importing a bigger proportion. Viewing that proportion against a fairly stable consumption level, the overall volume of imports in the year 2000 was over 205,000 tonnes. The forecast is that in 2003 it will be almost double that amount — 390,000 tonnes — going up from 20% to 40% of the market.

102.

Imports occur in two ways. Beef from the Republic is getting into supermarkets; there is a shortage of British beef, and the supermarkets are willing to take Irish beef at a cheaper price. Even cheaper beef is also coming in from third countries, particularly those in South America. With up to 40% of next year’s market being imported, imported beef is, to a large extent, dictating the price level and pulling it down. When they had 20% of the market, there was some effect, but you could insulate yourself. At 40% you cannot, and there is a residual effect.

103.

Something else is also affecting the market this year. Supermarkets are stocking British beef, but there is no promotional money behind it. You could say this is fallout from political devolution, but the British beef campaign has ground to a halt. It is hard to say how much is attributable to the aftermath of foot-and-mouth disease and imports and how much to the fact that British beef is not being promoted.

104.

Sheep enjoyed record prices in 2001. This year has been as good but not better than in the past. What we have not had is as good a second half of the year — prices then were at record levels. It is not a good comparison, but in 2001 the average price was 256p per kilo for lambs, which was £15 a head greater than the previous year, representing an increase of 43%. It is fair to say that the previous year was not particularly good. That £15 had to be offset by the fact that people received a higher market price and reduced yield premium — down £5·25.

105.

There was an overall improvement to the lamb trade. In the early months trade was poor, and there were three reasons for that — two major and one minor. The relatively minor reason was that we could not export lamb to the Continent, particularly France, for we did not have a big trade at that stage; it still hit us, however. The major reasons were that we had no live export trade to the Republic, and Great Britain could not export lamb to France. Great Britain was our big market; suddenly that was vastly oversupplied, and the price came down.

106.

However, we secured regional status for the second time and advanced it in early June. Within days lamb was exported to France, and the price shot up. The French market was badly undersupplied owing to low quantities of Great Britain lamb. We got another boost to prices in late August when the live export trade recommenced. There was extra competition because the whole of Ireland was putting everything it could into France, and the prices were phenomenal. Those who were marketing in spring and early summer were adversely affected. However, for the greater proportion of the year and the greater proportion of lambs — about three quarters, owing to seasonal factors — we benefited from higher prices.

107.

In the latter part of 2001 Great Britain secured regional status and was allowed to export lamb. However, it did not do so until 2002. On about four occasions there were rumours that Great Britain was about to export lamb, and the price fell for a couple of days before bouncing back up. However, when Great Britain started to export in 2002, the French bonanza disappeared. Compared to a normal year, the French market is still short of lamb. Owing to the high prices of last year, demand has fallen, and they are getting more lamb from Great Britain than they got from the Republic and us last year. The market is content; prices are cheaper, and the bonanza has gone. Lamb prices for the first half of 2002 were much the same as last year. However, for the second half so far, and for the rest of the year, they will be well down, for last year was the bonus, and that has disappeared. We are back to a normal trade.

108.

The Chairperson: That was a survey of what has happened. Have the Government been in touch with you about maintaining a preventative barrier against a future outbreak of the disease?

109.

Mr Rutledge: There has been no specific communication regarding planning future strategies.

110.

The Chairperson: The threat has ceased, but preventative measures have not yet been put in place.

111.

Mr Rutledge: From the veterinary perspective, we do not have an absolute familiarity with what controls remain at ports, other than casual observation as we travel. We should not worry, unless there is an inadequate level of control

112.

The Chairperson: Do you agree with the general thought which seems to be abroad that, if we get the disease again, it will be imported?

113.

Mr Rutledge: That is a veterinary question; it is a contagious disease. My understanding is that travel routes would aid the physical transmission of the disease.

114.

The Chairperson: We have two doors: the sea could bring it in from Great Britain, and we have a land barrier, so we could be struck from either side. We know the rumours about how it was spread when it came before, and some of those had some basis in fact, as far as we could ascertain. Do you agree that we still have two potential highways along which the disease could come?

115.

Mr Rutledge: There are sufficient grounds for us to continue to worry, and controlling the importation of meat and livestock is critically important. I assume that you are referring to the unnecessary and unproductive movement of livestock. That has been curtailed to a significant degree by the controls which remain in place.

116.

Mr Armstrong: Can you suggest a good approach to ensure that a disease cannot enter the island of Ireland or the UK?

117.

Mr Rutledge: It is easy to say that we must clamp down on every piece of meat or livestock which might cross our borders. On the other hand, the survival of Northern Ireland’s livestock production in the longer term depends on export markets, whether for beef or sheep. In that sense, we cannot have free trade in one direction and obstructions in another. That presents us with a conundrum, which can be resolved by examining other major livestock-producing countries. This is anecdotal to some degree, but other countries have a far tighter regime on the control of the movement of meat, for example, through people carrying it in suitcases. Even after the crisis and news reports on it, it is both frightening and appalling that such activities seem to be continuing. Without having any major impact on formal trading and the open market, there should be controls to prevent a disease arriving through illicit trade.

118.

Mr Armstrong: If our standards are so high, should products imported into Northern Ireland be of the same standard as Northern Ireland products exported to other countries? How could that be done?

119.

Mr Rutledge: There are several aspects to that. It goes without saying that there should be a level playing field so that our industry need not face hurdles which other industries do not. We are strong supporters of that. However, it must be remembered that, as a consequence of foot-and-mouth disease, customers perceive a greater risk from Northern Irish products than products from Australia, New Zealand or some South American countries, although there have been quite frequent outbreaks of foot-and-mouth there. We promote the level playing field through Government regulation and through trying to convince industries and customers to deal with us equitably.

120.

Mr Armstrong: Scrapie is another potential problem. Will that affect sheepmeat and other meat imported into Northern Ireland?

121.

Mr Rutledge: I am not familiar with scrapie in all countries, but the major competitors in sheep are New Zealand and Australia. My understanding is that there is no history of scrapie there at all.

122.

Mr Savage: How are processors coping with trying to regain markets which were lost owing to BSE?

123.

Mr Rutledge: We are delighted with this morning’s news from France, of which the Committee will be aware. It will be very significant if the French Government confirm that they will accept the advice of their food safety agency and open their markets. From time to time, we have sought opportunities for Northern Ireland to re-engage in beef exports. The most attractive opportunity for the past year and more has been to sell red offal to France. If the ban in France is lifted, it will be the first opportunity to re-engage in export. The currency problem remains in regard to prime cuts, although there are occasional seasonal opportunities to sell prime beef to European markets. The currency is against us, but the offal market has been consistently better in mainland Europe, particularly in France. That is one of the first opportunities which will open up for our industry.

124.

Mr Savage: We all know that confidence for farmers and fatteners is very low, having been damaged by events during the last four years. We want to retain an agriculture industry here, but how can we raise confidence? The farmers have been losing money, and that cannot continue. Restoring confidence must involve effort from the fattener, the LMC and the many other players. If we do not raise the fatteners’ and farmers’ confidence, they will lose interest in livestock farming.

125.

Mr Rutledge: That is a complex dilemma. We agree with the point about the fatteners not making much profit. However, there is a problem in that, for several reasons, the fatteners have a shortage of raw material. If you look at what has happened in the marketplace, you will see that all the profit has migrated back to the calf-producers. They have been getting any profits available in the beef sector, and that leaves nothing for the finishers. That problem is being compounded by the payment of suckler-cow premium on heifers. The raw material for the fattener is drying up.

126.

There is a big issue about cattle from the Republic of Ireland and beef labelling. The produce which historically came to Northern Ireland farms for finishing and processing found its way into the British meat market. That is no longer possible because of the forceful implementation of beef-labelling regulations.

127.

We can all work at the problem, but I do not know how we can move the margin to share the profits better among the farming community — never mind beyond that community. The debate about the apportionment of the profit margin between processors, retailers and farmers goes on.

128.

Mr Savage: Finally, the number of cattle coming from the South into Northern Ireland factories seems to undermine the prices paid to our farmers. This week, in one place alone, four double wagons were brought up from the South. The cattle were killed in our factories, and I have the facts to prove it. That practice is undermining our farmers.

129.

Sometimes I might disagree with the LMC, but I agree with one thing that it said several weeks ago, which was that Northern Ireland farmers are not getting a good enough price for their top-quality cattle. How can we ensure that the farmer gets a fair price for such animals? When I hear about the other cattle coming in, I think that it puts the LMC on the spot, for those cattle must go through the livestock market, and the Department’s officials deal with them in the factories. A great deal of work must be done to address the issue.

130.

Mr Rutledge: Our capacity to influence what anyone pays for anything is limited. However, the big contrast between beef and sheep is that the sheep farmers have the opportunity of every market available, including live exports. That is denied to the beef-producer, and as we work past the BSE crisis, we hope that all market opportunities will be open to such people, and that we can therefore have more confidence in payments as a fair reflection of value.

131.

Mr Douglas: You mentioned the difficulties surrounding imports at ports and airports. Serious misgivings about the procedures in place were detailed in submissions received by the Committee. What would be required to curb illegal lamb imports, especially those going direct to slaughter? Considering the fact that the outbreak in Northern Ireland occurred because sheep were imported, do you believe that they should be subject to individual traceability?

132.

Mr Rutledge: There are two sides to the debate about individual traceability. From the marketing point of view, it would be a good thing in the sheep industry. However, from a practical standpoint, it is a fraught and complex process. The French aspiration to have declarations on sheep over or under six months old has been deferred by the new French Government. If it is introduced, however, individual identification will be a great asset in the marketplace. If it disappears, it is arguable whether the merit of imposing the burden of individual identification on the farming community will be worth it.

133.

Mr Douglas: What else can be done about illegal importation? There is no doubt that sheep and cattle are coming in for slaughter.

134.

Mr Rutledge: The importation of cattle for slaughter is not illegal if they are properly certified. I cannot say that none is coming in illegally, but for the most part movements of live animals are subject to a certification process.

135.

Mr Ritchie: The problem — which one hopes has been resolved — was not that sheep were illegally imported, but that they did not go where they were supposed to go. If they had gone where they were supposed to go, they would have been slaughtered, and we should not have had a case. We do not know; they might have been out of the way before the disease spread.

136.

The other problem is the illegal import of meat. The problem starts in Great Britain. Draconian measures would have to be taken to stop it, and I do not think that the public would wear them. It is ridiculous to hear stories about suitcases dripping with blood.

137.

Mr Douglas: Australia and New Zealand have managed to curb that type of thing. I have no problem with draconian measures.

138.

The Chairperson: It would worry me if preventative steps were not being taken. We are still subject to pressure, and it could easily be amongst us quickly. Once it got a grip, it would be hard to stop. There will be no culling money; it will be a different ball game, and there will be great change.

139.

Mr Rutledge: It looks as if the European Commission is moving in the direction which you have described.

140.

The Chairperson: That is the message which I am getting.

141.

Mr Rutledge: That could have an impact on our export marketing, since several potential customers —

142.

The Chairperson: Yes. People will feel that the disease has been cured, but it is not fresh meat, although Argentina, for instance, does not know what has happened. The Argentinians do not know about the meat or what inoculations it has received; they think it is great stuff.

143.

Mr Kane: An abattoir in short supply of stock can ring a source for stock to slaughter. The source may state that he can supply but that the 90-day period of retention stipulated is not up on some of his stock. The owner of the abattoir will reply, "We shall sort that out", and, needless to say, the stock is supplied. Where do producers adhering to the rules and regulations stand? Rules are being flouted right, left and centre. The LMC is turning a blind eye, and that is happening under the Department’s nose.

144.

As far as I am concerned, the individuals responsible for the farm quality assurance scheme are not carrying out their duties. The Department should actively take on the job of developing a compulsory farm quality assurance scheme, and this Committee should propose that. That is the only way forward for producers who are adhering to the rules and wish to develop their enterprises. The farm quality assurance scheme does not satisfy the requirements laid down, and it definitely does not inspire farmer confidence. Can you gentlemen take action on this, or is it a lost cause? Is your organisation a dead loss?

145.

Mr Rutledge: Your last comments may or may not be valid, but farm quality assurance is clearly a big issue in the farming community. There is massive change, and we could occupy the Committee for a full morning going through all the changes on farm quality assurance — not locally but throughout the UK and further into Europe.

146.

Regarding the earlier part of Mr Kane’s contribution, those circumstances do not imply anything illegal or unethical. There is a massive market for commodity beef- and sheepmeat. The entire catering sector does not require farm quality assurance. A processor buying a product to sell on the commodity market — mainly into the catering trade — does not need farm quality assurance. The implication of something amiss is not necessarily proof that anything is amiss.

147.

The Chairperson: What about the 90-day period of retention?

148.

Mr Rutledge: There is a 90-day qualification period for eligibility for farm quality assurance, which is triggered on the Animal and Plant Health Inspection Service computer. The number of days from moving onto the farm is recorded, and in that 90-day period the animal will not come to the abattoir. For such meat to be identified and labelled "farm quality assurance" under the beef-labelling scheme, it must be on the farm for 90 days.

149.

The Chairperson: That does not apply to the catering business.

150.

Mr Rutledge: The catering trade, for the most part, seeks the cheapest product, and that is where the majority of the South American beef is going to. Some major customers, such as the Great Britain multiple retailers, are bringing in a little, which worries us, but at present it is a small part of their trade.

151.

The Chairperson: Correct me if I am wrong, but I am clear in my mind that the catering trade does not want anything too expensive — they are not worried about speciality meat and will buy it anyway. If someone wants to slaughter that meat, it can be slaughtered even though it is not up to the standard of quality assurance.

152.

Mr Rutledge: There are exceptions. I do not refer to everyone in the catering trade, but the broader part of the catering trade does not require farm assurance. That does not mean that the product is unsafe or unfit in any way. It is not absolutely devoid of controls; it must comply with legal production requirements in whatever state it originated. In general, your statement was correct.

153.

Mr Kane: There is no doubt that the cattle had "farm quality assurance" stamped on them. Their retention period was not completed as had been stated. The rules and regulations are flouted right, left and centre, regardless of whether Mr Rutledge wants to admit that. That is a fact, and it happened. I have information from a departmental official, whom I shall refrain from naming, that it happens day in and day out. The LMC does nothing about it. That, to be frank, is the situation.

154.

The Chairperson: When you answer that, Mr Rutledge, if you care to do so, perhaps you could explain something important about which I am not clear. We pass judgement, but the farm assurance scheme is not your responsibility — or is it?

155.

Mr Rutledge: We seek in our activities, and in our participation in the farm quality assurance scheme, to make a marketing tool available to Northern Ireland. That is necessary if we want to serve the best-paying customers, who are the multiple retailers. The scheme is essentially run by an industry board, which is a mixture of producers and processors with the involvement of retailers, scientific experts and others. Under the EU standard for such schemes, the process of on-farm inspections has had to be passed to an independent body, which is owned by a broad cross-section of the Northern Ireland agrifood industry. The participation of the LMC simply promotes that, both to the farming community and to our potential customers, the retailers.

156.

The Chairperson: The Minister said this morning that it is not your responsibility.

157.

Mr Rutledge: There is no statutory obligation on our part to do that; however, we are required to ensure that the product is available for the markets. Clearly, the best-paying markets for Northern Ireland beef are those which require farm quality assurance, namely the Great Britain multiple retailers. That is the best market in Europe — probably in the world — for beef.

158.

If I might return to the question, from time to time it annoys us that people cite supposed facts without evidence. If there is evidence of the circumstances described in the question, that evidence should be reported to the Northern Ireland Trading Standards Service, who are the official body with the power to do something about it. Certainly, the LMC would do so if the evidence were there.

159.

Mr McHugh: The point concerning the catering trade is important, but people are not, in general, aware of that. The caterers use the largest percentage of meat, and they can more or less do what they like with it. They can get around everything, including labelling, and can source their raw product from almost anywhere. We have no control over that. Probably the only way to get around it is for people to ask in hotels or whatever for the exact source of the meat. People tend not to do that, however; it is treated as if it were of the same quality as that stocked by the multiple retailers. That is a mistake. Perhaps there is a marketing fault in advertising which could be corrected by the farmers.

160.

It is a major problem for farms trying to produce high-quality beef. As a result, the catering trade, which is the biggest food user, is not using local produce and does not need to. Indeed, the catering trade would rather not use local produce so that it can source produce at the lowest price.

161.

Importing low-priced animals was one of the reasons for the outbreak of foot-and-mouth. Farmers had to struggle to make any sort of profit, which made some people inclined to source something from somewhere else, including smuggling, which allowed foot-and-mouth to come here from Britain.

162.

Quality has never paid. You are in the business of quality assurance and trying to raise quality standards on farms. Over the last 20 years, it has never really paid farmers to produce quality beef. They have always been confounded, in that Friesian or Holstein beef will still fetch the highest price for McDonald’s burgers. That is the reality, whether here or in the US. The end product still fetches a high price, but the farmers do not see that return for the high-quality beef which you force them to produce through quality-assured schemes.

163.

Nit-picking by people from quality assurance schemes who look for bars on doors of empty houses which have absolutely nothing to do with the production of beef in an attached shed or farm drives farmers away from those schemes. Along with all sorts of regulations, the pressure is making the industry uncompetitive. Will you consider being a little more flexible in dealing directly with farmers, especially given the current immense crisis in the industry?

164.

It is quite an important point that regimes cannot be strictly adhered to when the whole industry and many farms are close to meltdown. That is a major annoyance for farmers about whom we are hearing. We must move towards the vision group’s proposals to try to take us to a new point. Unless you are able to deal with the issue of paying for quality beef and driving towards world prices, what is the point in having open markets to France when they want low-priced products? How do we ever reach the open market?

165.

Mr Rutledge: There is much to answer. Beef labelling does not apply to the catering sector, but the infrastructure which delivers the product to the catering sector means that it is labelled until a caterer brings it into his premises. However, the caterer does not have to convey that information to the consumer. Labelling applies in a sense, but the information need not be conveyed to the consumer, as retailers are required to do. The catering sector is probably marginally bigger than the retail sector, and that is where beef consumption is growing.

166.

I said that we could spend a massive amount of time discussing farm assurance in detail. The fundamental change brought about by the EN45011 standard is that whatever is written into a quality standard must be delivered. If farmers see that as nit-picking and annoying, the difficulty is that it is what the industry agreed as the standard. A farmer will get angry if he does not comply with the quality standard in some small respect, but we must look beyond that. Where bureaucracy is involved, whether through taking a photograph or making some minor amendment, the vast majority of farmers are passing the inspection very satisfactorily.

167.

We must remember that this is the first cycle of EN45011-standard inspections. We expect that the second year will be much easier because farmers will already have had an inspection. I agree that there has been great annoyance about the perceived niggling aspects of the scheme. However, an independent structure has been set up to monitor compliance with the standard, so we must comply with it. What is written into the standard is to some degree out of the hands of the Northern Ireland industry. Although we can write whatever we like, under the arrangements in place, our scheme must be equivalent to schemes operated in Scotland, England and Wales. Through our contact with the Great Britain body, Assured Food Standards, we have established equivalence for the Northern Ireland scheme. That equivalence allows us a little leeway to do things differently here and there. However, we must be full square behind UK standards on major issues.

168.

Mr McHugh: The industry in England works on a different scale, and the farms are much larger. There have been no grants for farm infrastructure here for several years now, and that infrastructure is falling apart. Many farmers work only part-time and do not have time to carry out all the small repairs necessary. I should like to see the figures for the vast majority which you mentioned.

169.

The Chairperson: The figures are important. What percentage of meat is not up to the catering-industry standard and what percentage is quality-assured?

170.

Mr Rutledge: Some 80% of the cattle slaughtered in Northern Ireland are eligible for farm quality assurance status and are marked as such. However, the carcasses of those animals are broken down into an estimated 70 different items, which do not necessarily all go to a customer who requires farm assurance. Thus many items are eligible for farm quality assurance status but are not sold to farm quality assurance outlets or customers.

171.

I am reluctant to give you definitive figures for the current period. However, I recall that around 30 or 90 days after the inspection, 83% of the farmers were judged to be complying with the standard, although a significant percentage had a few minor non-conformances. The cycle lasts 18 months, and as we only started EN45011 inspections immediately after the foot-and-mouth crisis, it will not end until August. We shall be able to give the industry and commentators a more definitive picture when a full cycle has been completed.

172.

The Chairperson: Those figures are important for the future of the industry.

173.

Mr Rutledge: We monitor them.

174.

Mr Kane: The Committee will not get the true figures.

175.

The Chairperson: We shall get figures from the organisation which Mr Rutledge heads. Those figures will be the figures according to that organisation. We shall have to decide whether they are credible.

176.

Mr Rutledge: We should not treat the Committee with contempt by giving it figures which we do not believe to be true.

177.

Mr Kane: It has happened in the past.

178.

The Chairperson: We cannot get into that now. The Committee meeting has lasted 25 minutes longer than planned. We have heard Mr Rutledge’s views, which have given us much food for thought. The questions asked today probe matters essential to the Committee, especially the farm assurance scheme.

179.

We feel that the farm assurance scheme, rather than doing what it was supposed to do, has become a liability to farmers. They are carrying something that is of no benefit to them. Given all the trouble which they have had, they are not getting the price which they should compared with others who do nothing and still get their beef sold.

180.

Mr Rutledge: Remember that South American beef struggles to make £1 a kilogram. We are not at that price level. Our average price last year was £1·56 a kilogram. We are not currently competing with those commodity suppliers. People who say that there is no benefit must carefully examine the alternatives of going for the commodity markets.

181.

The Chairperson: Many farmers are telling us that they are worried that they are going to all that trouble while there is another entrance into beef sales where people do not know the standard of the meat. On the Continent, there is a change. When I went to the Continent, there was cheap meat. Today, its buyers want quality-assured meat. There is a far bigger market on the Continent for quality-assured meat than there has ever been.

182.

Mr Rutledge: The biggest single customer whom the Northern Ireland industry ever had was the company which set up farm assurance in Northern Ireland.

183.

Mr Armstrong: How many tons of meat do the caterers take a year?

184.

Mr Rutledge: Of the 930,000 tons of total UK consumption, about half goes to the catering trade.

185.

Mr Armstrong: How much of that is imported?

186.

Mr Rutledge: As Mr Ritchie said, about 40% of the total is expected to be imported next year. It is building up from about 20% in 2000.

187.

Mr Armstrong: More imported meat is being bought every year.

188.

Mr Rutledge: That is because of a major deficit in the UK supply base as a consequence of the foot-and-mouth disease culls.

189.

The Chairperson: The meat cannot be supplied because there were so many animal deaths. By culling so many, we opened up the market to other suppliers.

190.

Mr Rutledge: There is a major dilemma when we talk about the promotion of British meat. If there were to be a major campaign, would it simply promote the product of another country? That was debated in the industry and affected the restructuring of the Meat and Livestock Commission in the UK.

191.

Mr Armstrong: What age is the meat which is coming from other countries? Is it over 30 months old?

192.

Mr Rutledge: Inevitably, much of it is.

193.

Mr Kane: Farmers can only be bluffed for a while. They have had enough of being bluffed.

194.

The Chairperson: We have had a full discussion and look forward to receiving those figures. Thank you.

PLEASE NOTE THAT THE MINUTES OF EVIDENCE HAVE NOT BEEN EXAMINED BY MEMBERS AND WITNESSES

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