ANIMAL HEALTH AND CONSUMER CONFIDENCE

1.         Introduction

This paper aims to review the relationship between animal health scares of recent years that have led to a decline in consumer confidence in animal produce, and which has consequently affected farm income and the agriculture industry as a whole. Its ultimate objective is to place in context the potential impact across the entire food sector of animal diseases such as FMD, regardless of whether they have an impact on human health, and draw together food safety, animal health and welfare, and economic issues. BSE is used as a case study to emphasise the dramatic effect that an animal disease can have on consumer confidence and subsequently the entire agriculture industry. The paper broadens to discuss movement at a European level to incorporate animal health and welfare issues and food safety. This is reflected in the close working relationship between Commissioners Franz Fischler and David Byrne who have agreed that issues such as animal health and welfare and food safety, as well as quality produce must be addressed in parallel. It is also evidenced in the recent mid-term review which proposes that continuation of direct aid should be conditional on compliance with tougher environmental, food safety and animal welfare standards.

The paper aims to give the Committee a more holistic view of the necessity for improved biosecurity in order to protect the agriculture industry of Northern Ireland.

2.         BSE - A Case Study

Concerns over animal health and the link to human health have led to a decline in consumer confidence in meat throughout Europe. At a conference in Brussels [v] Dr. Dietmar Weiss (Head of Livestock and Meat Department, ZMP Germany) indicated that household buying of fresh beef was down by over 45% in Germany largely due to a lack of public confidence in meat safety due to the BSE crisis. By the middle of 2000 the European meat industry was relatively stable reaching the level of consumption similar to that of pre-BSE. However, another BSE scare in October of that year greatly influenced the situation. This was largely due to increased numbers of BSE being detected throughout Europe due to systematic testing for the disease. In France for example beef consumption fell by 38% in December 2000 compared with December the previous year with other countries experiencing similar reductions [vi] . A recent survey indicated that 20% of Germans were either worried or very worried about the possibility of eating BSE tainted beef, a further 36% were ‘not so worried’ [vii] . This consequently had an effect on the price paid to the farmers with prices between August 2000 and August 2001 falling across Europe - from around 17% in Spain to 40% in the Netherlands.

The 1996 outbreak of BSE in the UK resulted in a 6% decline in consumption although this returned to pre-crisis levels after 4 years. During that time the global consumption of beef actually increased due to demand from developing countries therefore the global market was relatively unaffected by the crisis [viii] . However, in the ‘second’ crisis shipments of beef from the EU, the world’s second largest beef exporter during the mid-nineties, accounted for 10% of world trade in 2000 down from 16% the previous year⁵. It is evident therefore that changes to consumption in the European market can have major effects on the global market. One important difference between the current situation compared to 1996 is that BSE is no longer just a UK problem. As mentioned above cases of BSE are rising throughout Europe, principally due to targeted surveillance programmes being conducted in Member States, and further a field i.e. Japan. In 2001 there were over 7.5 million healthy animals tested for BSE in Europe. Of these only 276 animals were found to have the disease but they were spread throughout European countries [ix] :

n     France (83 positive from 2,382,225 healthy animals tested);

n     Germany (36 from 2,565,341);

n     Spain (35 from 328,517);

n     Republic of Ireland (34 from 636, 895);

n     Belgium (28 from 359,435);

n     Italy (27 from 377,201);

n     Portugal (17 from 28,384);

n     Netherlands (11 from 454,649);

n     Denmark (3 from 250,412);

n     Austria (1 from 216,045); and

n     Greece (1 from 15,360).

There is also concern that the disease may also be present in sheep.

The fact that recent food scares have been related to contaminated feedstuffs has led to the introduction of strict controls. The importance for such controls is highlighted by a recent report which suggests that it is virtually impossible for an infected cow to pass on BSE to her calf [x] . Essentially this removes maternal transmission as an explanation for BSE in those animals born after 1996 when the ban on meat and bone material in feed was introduced. Cattle however in the UK and across Europe are still getting the disease. Thirteen cattle that were born in the UK post-1996, when the feed ban was introduced, developed BSE. Three of these have been born in NI including an animal born in 1999. The DARD Minister stated, in relation to this latest case, that "the most likely route is via maternal transmission" [xi] . However, in an interview on Radio 4’s Farming Today programme Professor John Wilesmith who carried out the study stated that "My working hypothesis is that we are still dealing with cross contamination but not from a British source but from ships importing [feed] into Britain". This is supported by a report to the EU Commission [xii] that indicates that despite ban on feeding mammalian meat-and-bone to ruminants, new cases of BSE were still occurring, showing that ruminant feed had been contaminated. It is important to note however in the recent NI case that the animal was destroyed and no meat entered the human food chain and therefore there was no risk posed to human health. Despite the market implications, Europe-wide production is exceeding consumption and this is expected to continue. The Commission forecasts 740 000t of intervention stocks by 2003 and 240 000t by 2008³.

Consumers are more aware than ever of the potential adverse affects of eating unsafe food. Consumer confidence in the safety of meat plummeted after BSE was discovered in cattle in the UK in 1986. This concern was based on the link between BSE and variant Creutzfeldt-Jakob Disease (vCJD) described as the human form of the disease. The government in response to BSE and concerns over the safety of meat implemented a number of controls. These include [xiii] :

n     The slaughter of all cattle suspected of having BSE since 1988

n     The checking of all animals sent for slaughter are checked by a veterinary surgeon to ensure that no suspected cases are slaughtered for human consumption

n     The removal from the food chain of tissues that are known to harbour infectivity [xiv]

n     In 1996 the sale of beef from animals over thirty months was prohibited

n     In 1988 feed that contained mammalian meat and bone material was prohibited from being fed to sheep and cattle

Also at the Future of the Meat Industry Conference Aude L’hirondel, a Food Officer from Euro Coop [xv] , indicated that the decline in consumer confidence in meat was due to a range of issues including:

n     Concern over the intensive farming

n     Lack of clarity and consistency in EU food legislation

n     Not enough consultation and partnership with operators of the food chain

n     Failure to strictly enforce EU and national food legislation

Euro Coop support the concept of "farm to table" in relation to food safety i.e. that food safety must be considered across the entire food chain.

3.         Effect on Response Retailers

The loss of confidence of the consumer in food safety is acknowledged by the retail sector. At the conference in Brussels, Steve Murrells Category Director – Fresh Meat, Poultry and Fish for Tesco Stores Ltd stated that:

"Field to fork assurance, working to ever-increasing standards of hygiene and welfare, is needed to provide customers with a guarantee of the traceability and integrity of the entire livestock production chain. This must cover the standards applied to the rearing of livestock, including feedstuffs, right through to handling during transport, slaughter, processing and onward distribution" [xvi] .

The effect of a loss in consumer confidence in a product, company or industry can be dramatic. Snow Brand Food, a major Japanese meat packing company, is to close operations after admitting it had repackaged Australian beef as Japanese to qualify for government subsidies aimed at helping domestic meat producers affected by the mad-cow scare [xvii] . A spokesperson stated:

"Trust in our company has been upset severely, clients continue to cancel business with us, and there was no foreseeable recovery in sales".

Consumption of beef in Japan has fallen by a reported 50% since the first case of BSE was reported in August of last year [xviii] . This has had a knock on effect on the Australia beef market since 25% of all beef produced in Australia is exported to Japan. It is evident therefore that consumers will avoid beef in general, even that which is BSE free, indicating the powerful global impact such scares can have on an entire industry.

The Chairman and Chief Executive of Macdonalds, Jack Greenberg stated:

"The year 2001 was difficult for the company largely because of external forces, particularly weak economies and BSE" [xix] .

Net profits for the company actually fell by 40% between October and December of last year.

Unfortunately, BSE is just one of a range of food and animals disease scares that the agri-food industry has faced in recent years. Others include:

(i).       Hormones

The EU has been involved in a dispute with the USA and Canada over the levels of hormonal residues in beef imported into the EU. The EU initiated a ban on animal growth promoters in 1988. This ban is not applied to those third countries exporting bovine meat and meat products into the EU that have either similar legislation or operate a hormone-free cattle programme. The EC Scientific Committee on Veterinary Measures relating to Public Health (SCVPH) established a working group to address risk assessment of the six hormones in question. It concluded that a risk to consumers did exist including possible carcinogenic, developmental, immunological, endocrine and neurobiological effects [xx] . In light of this the Commission proposed to the Council and the European Parliament a complete ban on the use of 17b eostradiol and some of its derivatives on farm animals. The maintenance of a prohibition on other growth promoters that have certain physiological effects was also recommended. This was adopted by the Parliament on 1st February 2001 although the Commission is still awaiting the Council’s position.

(ii).      Other residues and banned veterinary substances

Recently the EU placed a ban on a range of products form China intended for human consumption or for use in animal feed including honey, rabbits, poultry, molluscs, crustaceans, shrimps, prawns and pet food [xxi] . This was as a result of a visit from the EU’s Food and Veterinary Office (FVO) which detected deficiencies in controls relating to residues and the use of banned substances in the veterinary field.

(iii).     Contaminated Feed

In 1999 feedstuffs contaminated with dioxin caused the biggest food scare across Europe since BSE. A manufacturer of feedstuffs inadvertently mixed mineral oil, possibly intended for car engines, with vegetable oil when preparing the feed [xxii] . This led to bans being imposed across Europe and further a field on Belgian produce. The pig and poultry sectors were also affected. The Belgian government agreed to destroy 115 000 tonnes of poultry, pork and beef [xxiii] .

More recently a Belgian company, Bioland, apparently supplied glucose syrup contaminated with the banned growth hormone MPA which can cause infertility in humans, to animal feed manufacturers [xxiv] .

(iv).     Avian Flu

The 1997 outbreak of avian flu in Hong Kong resulted in the slaughter of 1.5 million birds. The illness was also transmitted to humans resulting in several deaths [xxv] .

4.         The Vision Report: animal health and welfare and food safety issues

The issues of food production in terms of safety and quality cannot be divorced from wider issues such as environmental and ethical considerations and the whole issue of sustainability. This at a local level is becoming more evident given some of the recommendations in the recently produced Vision Report and the integrated approach that it advocates to ensure the sustainability of the agriculture industry. The report recognises the importance of food safety: ‘Perhaps the major challenge is to produce food which is safe and seen to be safe’ and acknowledges that food scares ‘have given greater focus to what was probably already a growing consumer concern with safety’. The report goes on to acknowledge societal concerns about animal welfare, which is alluded to above as being linked to animal health, and states that ‘The outbreak and aftermath of foot and mouth disease in the UK has served to underscore these concerns and move them further up the political agenda’ [xxvi] . Similarly, producers need to be aware that consumers may equate poor animal health and welfare standards with poor food safety standards and subsequently avoid certain produce.

Indeed, as if to validate this point, the report recommended (D4) that ‘All farm quality assurances schemes covering livestock should have a significant animal health and welfare component drawn up in conjunction with the veterinary profession, including a herd/flock health plan and covering farm biosecurity’. However, it is evident that any proposals for clearly defined animal and plant health policy must be supported by appropriate legislation. Again the report calls for this approach: ‘The animal health legislative framework within Northern Ireland must be comprehensively reviewed and reformed. The aims of this should be to ensure:

n     clarity;

n     enforceability;

n     adequate sanction for wrong-doing; and

n     comprehensive coverage of the livestock chain, including hauliers’.

These recommendations have the potential to assist in the marketing of NI food products. In both New Zealand and Australia for example, it is recognised that continued improvement in animal health and welfare and food safety standards could be used effectively as a marketing tool to gain access to new markets. This is especially relevant given the consumer emphasis on each of these issues and the growing recognition that food safety must extend from the farm to the fork and therefore encompass animal health. Additionally, the potential liberalisation of trade and global sourcing of products mean that there will be a greater threat to the biosecurity of NI. The report states in recommendation J8: ‘Northern Ireland’s current disease control arrangements may need to become stricter to minimise the risks from global sourcing’. In recognition that even in the best of circumstances the threat can never be completely eliminated this recommendation continues: ‘In addition, Northern Ireland needs to be adequately prepared and resourced for crisis management, with comprehensive plans for cross-Departmental and inter-agency co-operation’. This is not simply a case of hoping for the best and preparing for the worst. It is essential to prepare for the worst regardless of one’s animal health status and even those countries, (Australia and New Zealand), that have arguably the strictest biosecurity measures in the world, have developed crisis-management plans that aim to implement a ‘whole-of-government’ approach to a crisis that a single department may be unable to deal with on its own. In NI for instance there were only 4 cases of FMD but the containment of this outbreak was due to the enormous resources that DARD applied and which, while successful, resulted in, according to the Minister, ‘a legacy of slippage in the control of other diseases. In particular, it has left us with a continuing build-up of Tuberculosis and Brucellosis in the animal population’ [xxvii] . Therefore, the successful containment of one animal disease has exacerbated the problems posed by others. Additionally it has curtailed many other aspects of DARD’s operation with many of the targets in the PSA 2000/01 not being met due to a focussing of resources to prevent spread of the disease. In any review of the department’s response to the FMD outbreak and what has been learned consideration must be given to how to minimise the negative impact on other disease controls.

5.         Organisation with responsibility for food safety

(i).    United Nations and World Health Organisation - Codex Almentarius

Consumer health protection was underpinned in 1985 by the United Nations Resolution 39/248 which produced guidelines that have been used in the development of consumer protection policies [xxviii] . The guidelines state:

"When formulating national policies and plans with regard to food, Governments should take into account the need of all consumers for food security and should support and, as far as possible, adopt standards from the Food and Agriculture Organization’s ... and the World Health Organization’s Codex Alimentarius ...".

The harmonisation of food safety standards is referred to in the Agreement on the Application of Sanitary and Phytosanitary Measures (SPS) (agreed in the Uruguay Round of World Trade negotiations) and the Agreement on Technical Barriers to Trade (TBT). Codex standards have become the benchmark "against which national food measures and regulations are evaluated within the legal parameters of the Uruguay Round Agreements" [xxix] . The SPS have the most relevance to the Codex since it states (in Annex A of the agreement on SPS):

"Any measure applied ... to protect human or animal life or health within the territory of the Member from risks arising from additives, contaminants, toxins or disease-causing organisms in foods, beverages or feedstuffs. .... Sanitary or phytosanitary measures include all relevant laws, decrees, regulations, requirements and procedures including, inter alia, end product criteria; processes and production methods; testing, inspection, certification and approval procedures; quarantine treatments including relevant requirements associated with the transport of animals or plants, or with the materials necessary for their survival during transport; provisions on relevant statistical methods, sampling procedures and methods of risk assessment; and packaging and labelling requirements directly related to food safety."

The highest priority within the Codex Alimentarius is to protect the health of consumers. To this end guidelines (The Recommended International Code of Practice - General Principles of Food Hygiene) have been produced and apply to all foods. Importantly it applies right across the food chain - from primary production to consumption indicating the key hygiene controls required at each stage.

The European Commission has provided funding (114 million euro) to Member States to enhance their capacity to respond to Transmissable Spongioform Encephalopathies (TSEs) and 40.45 million euro for the eradication and monitoring of 13 major animal diseases in the Member States. This funding is reflective of the Commission’s concern that it is important to improve the health status of Europe’s livestock which it sees as important from a perspective of protecting animal health and consequently human health [xxx] .

(ii).   The European Union – European Food Standards Agency (EFSA)

Ensuring that the EU has the highest standard of food safety is a key policy for the European Commission. To achieve this the EU produced a White Paper on Food Safety in January 2000 [xxxi] to ensure that the food safety issue is at the top of the agenda. Over 80 separate measures were identified in the White Paper for implementation over the next few years but one of the major conclusions was:

"Greater transparency at all levels of Food Safety policy is the thread running through the whole White Paper and will contribute fundamentally to enhancing consumer confidence in EU Food Safety policy".

David Byrne, the European Commissioner for Health and Consumer Protection, considers food safety the number one priority of his Directorate. Both he and Franz Fischler, Commissioner for Agriculture, Rural Development and Fisheries initiated a EU-wide debate on food quality, safety and production in March 2001 [xxxii] . Byrne and Fischler hosted meetings in member states in order to consult representatives of farmers, industry, retailers, scientists, academics and, especially, consumers. This followed the European Commission proposal for laying down the general principles of food law and establishing a European Food Authority [xxxiii] . The eventual outcome of this series of Round Tables, with meetings already haven taken place in Stockholm, Berlin, Dublin, Vienna, Paris, Brussels, Athens, London, Madrid and Copenhagen, was to seek views on what aspects of food safety needed to be included in agreement on the establishment of a European Food Safety Authority (EFSA). The Council of Agriculture Ministers and the European Parliament adopted the Regulation establishing the EFSA and a new framework for EU food law [xxxiv] .

The EFSA will primarily focus on risk assessment with the risk management function still remaining with decision-making institutions i.e. European Commission, the Council of EU Ministers, and the EU Parliament [xxxv] . Its role therefore will be to:

n     Scientifically evaluate risks

n     Collect and analyse scientific data

n     Evaluate evidence from industry on proposed substances or processes requiring Community level approval

n     Identify emerging risks

n     Provide scientific support to the Commission particularly in the event of a food safety crisis

n     Direct communication to the public on issues within its remit

One of the objectives of this legislation is to give assurances to citizens of Europe that issues to do with feed and food safety are being addressed at the very highest level. Among the powers that the Commission now has is the right to take emergency action in the event that a Member State cannot contain an emerging food risk. This action will ultimately depend on the seriousness of the situation but could include, for example, suspension of the marketing or use of the feed or food in question. The Commission will also manage a new rapid alert system which is foreseen as including obligatory notification "of any direct or indirect risk to human health, animal health or the environment within a network of national competent authorities, the EFSA and the European Commission" [xxxvi] . From an organisational viewpoint a number of regulatory committees have been reorganised within a new single body – the Standing Committee on the Food Chain and Animal Health. The committees that it replaces are:

n     The Standing Veterinary Committee

n     The Standing Committee on Foodstuffs

n     The Standing Committee on Animal Nutrition

n     The Standing Committee on Plant Health

The Committee will assist the Commission in the development of new food safety measures although its mandate will also cover the entire food supply chain i.e. from animal health issues on the farm to the food on the consumer’s table. Commissioners Byrne and Fischler held the final Round Table in Brussels on May 13th. Issues such as stakeholder involvement to assist farmers to attain quality production were discussed. But while it was agreed that it was up to the market to decide on a range of issues the Commissioners emphasised that "food safety was the bedrock of quality" [xxxvii] . Commissioner Fischler also stated in a speech at the European Food Summit 2002 [xxxviii] that: ‘There can be no further discussion about the quality of a product if it is not safe to be consumed. In addition to this, there must be basic standards relating to the protection of animal welfare’...

The relationship between animal welfare issues and food safety cannot be overstated particularly given the link between the consumer’s perception of good animal welfare standards and food safety. For example, a recent study indicated that: "Consumers are concerned about animal welfare, though often not as a priority in its own right: welfare is seen as an indicator of good food standards, so that high welfare production is associated with food quality, safety and healthiness" [xxxix] . In this regard the labelling of foods is necessary to give consumers confidence that the food they are purchasing meets exacting standards in animal welfare, food safety and environmental conditions. The red tractor symbol is a case in point although this has been criticised recently due to questions over the animal welfare standards applied [xl] .

Fischler went on to say ‘crises such as BSE and Foot and Mouth Disease have shaken consumers’ confidence. It is our duty to do everything we can to win back this confidence. Everybody must contribute to this task: farmers as well as the food-industry, traders as well as politicians, Member States as well as the European Union’.

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