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Mr. Patrick Nicholls (Teignbridge): Would this be an appropriate time to ask whether my right hon. and learned Friend will be saying something about the position of cattle that have been sold under the age of 30 months where there has been a substantial loss on the transaction? Is my right hon. and learned Friend attracted to the proposition that the £29.6 million provided by Europe should be applied entirely to help that sector? Can he say something about whether there might be matching funding to provide genuine compensation for the difference in respect of market values?
Mr. Hogg: My hon. Friend raises an important point, but perhaps he will forgive me if I respond to it in the course of my speech, as I have something specific to say on it.
Mr. Paul Marland (West Gloucestershire): On the subject of clearing the backlog, there has been some discussion about bringing into play some cold storage, so that animals that have been slaughtered can be stored in a cold store until the rendering capacity is available to treat the carcases. What is the current position on that?
Mr. Hogg: We have plans to bring on stream additional cold storage facilities. It is that fact which, at least in part, enables me to say that I hope that we shall clear the backlog by around the middle of October. It is important to have additional storage capacity, because we must render some parts of all beasts that are killed under the slaughter scheme.
I have already told the House--I hope that it is helpful to hon. Members--that copies of the draft orders are in the Vote Office. There are some further points that I think hon. Members would like to know. Ministers are likely to sign the relevant orders during the next few weeks--that is not absolutely certain, but likely. That would allow us to start the process of tracing animals in the way set out in the consultation paper and, where appropriate, to apply restriction orders.
There are also a number of questions to which the farming community is anxious to have answers--most notably, compensation. The Government have recognised the need for fair compensation, going beyond our practice for disease control measures.
There will not always be a ready market in the older animals that are slaughtered. Consequently, farmers will have to go out and replace an animal that is slaughtered with a younger animal, which is likely to be more expensive. We have also to take into account taxpayers' interests, however, and it would not be right for farmers to benefit by improving the quality of their herds at taxpayers' expense. Thus, we must strike a balance.
We have decided that, in the case of female animals, we will pay compensation at a value of 90 per cent. of the cost of a younger animal--in other words, 90 per cent. of replacement value--or market value, whichever is higher.
We have also recognised the need for additional compensation for farmers whose herds are most affected. Hon. Members will see our detailed proposals on this matter in paragraph 13 of the consultation document.
I recognise also that, within the farming community, there is grave anxiety about the prospect of a compulsory slaughter of healthy animals. Therefore, I repeat the assurance that I gave the House on 18 July: there will be no compulsory slaughter under this scheme unless the House has had an opportunity to debate the relevant order.
That assurance is subject to one qualification. Separate legislation applies in Northern Ireland, and farming organisations there strongly favour an early cull. Therefore, my right hon. and learned Friend the Secretary of State for Northern Ireland may proceed with slaughter in Northern Ireland in advance of any debate in the autumn. However, we will not proceed to a compulsory slaughter in Great Britain on that basis.
Sir Colin Shepherd (Hereford):
My right hon. and learned Friend has set out the Government's position as stated in the consultation document. As he will be aware, both the Country Landowners Association and the National Farmers Union took issue with increased compensation for farmers whose herds have been more affected. I should be grateful if he would amplify on that matter, rather than making his rather bald statement about securing a balance. Why does he feel that that balance is correct?
Mr. Hogg:
There are two elements in the compensation. First, there is compensation for the beef itself. On that, I reiterate what I have said already: compensation for female animals will reflect 90 per cent. of replacement value or market value, whichever is highest. The justification for a 90 per cent. rather than a 100 per cent. replacement value is that, inevitably, farmers will replace an older beast--as, by definition, it will be--with a younger beast. There is a degree of betterment to that.
It is perfectly fair for my hon. Friend the Member for Hereford (Sir C. Shepherd) to say, "This obligation has been cast on the farmer by the Government." However, we have tried to deal with the concerns both of taxpayers and of the farming community, by saying that 90 per cent. of replacement value or market value, whichever is highest, will take account of the balance that must be struck.
The second element in the compensation relates to the disruption that is caused. When one takes out cattle from a herd, one inevitably disrupts a farmer's business. My hon. Friend the Member for Hereford will see, in paragraph 13 of the consultation paper, the measures by which we deal with that matter. In very broad terms, they are as follows. If 10 per cent. of a herd is culled, there will be a 10 per cent. supplement on the value of an individual beast. The supplement will increase in a linear progression, so that there will be a 25 per cent. supplement if 40 per cent. of a herd is culled. I should say that the supplement is subject to a cap, which is explained in paragraph 13 of the consultation document.
It might be helpful if I give the House some information on several related matters. Under the over-30-month scheme, we have now slaughtered rather more than 270,000 beasts, and we are, as I have said, on course for clearing the backlog by mid-October. We would wish to complete, or nearly complete, this process before embarking on the mandatory selective cull.
I attach considerable importance to making speedy progress on our schemes for herds, or animals, which can properly be said never to have been exposed to the risk of developing BSE.
Mr. Robert Jackson (Wantage):
Will my right hon. and learned Friend give way?
Mr. Hogg:
I must make a little progress; I shall then certainly give way to my hon. Friend.
We are making excellent progress on the concept of the certified herd. We have discussed the scheme with the Commission, which has raised no objections. We hope to start the process of certifying herds by mid-August. This will provide an exception to the 30-month rule so far as the UK domestic market is concerned, and I would hope to be able to press for an early relaxation of the ban on beef exports in respect of the certified herds.
Mr. Jackson:
I greatly welcome what my right hon. and learned Friend has said about the passporting scheme. Does he agree that it must be a high priority, as it is the key to providing a watertight guarantee to consumers at home, in Europe and elsewhere?
Mr. Hogg:
My hon. Friend is entirely right. Easy identification of animals and their traceability are key elements in restoring the confidence of consumers and our EU partners. The UK has in fact for a number of years had a system which identifies each animal individually, and enables us to trace it back to its herd of origin, but we are improving and reinforcing that system.
Every bovine animal born in Great Britain after 1 July has to have a cattle passport recording all its movements. We are moving as rapidly as we can to a fully computer-based movement recording system. These are the types of development that my hon. Friend would urge on us.
Mr. Nick Ainger (Pembroke):
The Minister is talking about clearing the backlog by mid-October. A number of my constituents--farmers and cattle dealers--have mentioned the fact that dealers are not considered as collection centres. Slaughterhouses are informing these dealers that they cannot take the beasts they have, or their customers' beasts--the farmers' beasts--because slaughterhouses have to take 75 per cent. of their throughput from collection centres.
Farmers are being told by auctioneers with whom they have never traded that they--the auctioneers--must refuse to take their beasts into their collection centres. Will the Minister explain why he has stipulated that slaughterhouses must take 75 per cent. of their throughput from collection centres?
Mr. Hogg:
It reflects the pattern of the previous trade, but we are trying to secure a higher throughput through the live marts in order to bring about a slight skew in the system. Some discussions are taking place, especially with my hon. Friend the Minister of State, to try to ensure that live marts are getting a higher proportion of the clean cattle than is currently the case.
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