Examination of witnesses (Questions 182
- 199)
TUESDAY 21 MARCH 2000
MR PETER
STEVENSON, MR
DAVID BOWLES
and MR CHRIS
FISHER
Chairman
182. Good morning. Welcome. You know what we
have been investigating. We have obviously been talking to people
in Geneva. We are going to the United States shortly. We were
very interested in the memoranda which you have sent to us. We
have obviously discovered, in the course of our investigations,
that there is a lot of resistance, for diverse reasons, to trying
to incorporate formal animal welfare criteria into world trade
negotiations. This is for reasons which will be elaborated and
explored by the Committee this morning. I would like to start
by asking you a very direct question. Do you have evidence—and
by evidence I mean not anecdotal evidence but proper evidence—that
consumers are willing to pay for welfare, as opposed to saying
that they would prefer high animal standards and saying they would
pay for it. The anecdote on which I invite you to comment, which
has been repeated to us, is when somebody is going into a supermarket
and you ask them, "If you know you can buy bacon, which has
been produced to high standards, would you pay a bit extra?"
they say yes; but when you investigate their trolley on the way
out you find that they have done no such thing. Could you help
us by indicating whether you really think the market place rewards
welfare? That is really the question.
(Mr Bowles) You are aware of the RSPCA's Freedom
Food scheme, which is basically to establish a niche for good
animal welfare. It is interesting, if we are looking at hard figures,
to see how that has grown in the six years starting from 1994.
If we take, for instance, free-range eggs, that was the first
product that Freedom Food was launched under in 1994. At
that stage we had sales of 100,000 a month. Sales are now, in
2000, 70 million a month; so you can see the enormous growth that
has occurred in that particular market. This is because people
want free-range eggs. They are prepared to pay for free-range
eggs and they want a free-range egg product. Freedom Food
has expanded in other areas into processed food. We are just launching
a range of meat pies, for instance, where it is much more difficult
to encapsulate the animal welfare product into something which
has been processed. You will see from the way that Freedom
Food has grown that there is a niche there. I accept that
there may be a difference in what the public say in questionnaires
and what they are putting in their trolley but the public in questionnaires
are coming out extremely strongly in favour of wanting good animal
welfare standards. However, you can see from the Freedom Food
products that this is reflected, to a large extent, by what the
public actually do put in their trolleys.
183. You have cited eggs. I wonder to what extent
that is because people feel that free-range eggs are healthier
for them, and they buy them because they prefer them rather than
being interested in the welfare side. Is there another commodity
that you could cite, like eggs, with a similar experience?
(Mr Bowles) We have products in the pork range at
the moment. Now those products have not been going as long. It
is much more difficult to see a trend there but we have noticed
that there is a huge uptake in free-range good animal welfare
pork products. That is primarily because of the fact that we believe
the public is demanding good animal welfare. I do not necessarily
buy into the argument that they buy free-range because they think
it is healthy. The public is sanitised a lot about the arguments
between battery hen eggs and free-range eggs. They understand
the welfare problems with the battery hen system. I think our
surveys and Compassion surveys show that the public do want to
buy a welfare friendly egg. They are buying, not just because
of the health indications, but because of the welfare indications.
184. Is there a price threshold which applies?
In other words, are people willing to make this choice with Freedom
Food products—let us say, at a 10 per cent premium—but
not at a 15 per cent premium over the price? Where is the tolerance
in that regard? Have you any evidence of there being a tolerance
in that regard?
(Mr Bowles) The price is actually set by the retailers.
Peter can go into some of the problems; the fact that the retailer
is actually setting the differential price. We have had evidence
showing that when, for instance, Freedom Food do vouchers,
giving price off for products, there is a huge uptake in those
products. I do not know exactly where the threshold is but, yes,
there is undoubtedly a threshold that occurs.
(Mr Stevenson) We have done surveys, going back to
eggs, actually at the supermarkets. When we did a survey about
18 months ago the majority of supermarkets were reporting that
over 30 per cent of their total egg sales were non-caged eggs;
in other words, either free-range or barn. Three of the major
supermarkets were reporting over 50 per cent were non-caged eggs.
You always have the complication that this was looking at the
actual eggs and not the processed foods containing eggs. People
at the supermarkets are willing to pay that extra in order to
buy high welfare products. Most of the research so far, from our
point of view, has been done on eggs because, of course, that
was our big concern leading up to the decision of the EU Council
last summer.
Mr Paterson
185. What is your problem in the fastest growing
section of the egg market, which is powdered egg or liquid egg
which goes into processed pizzas or flans, things like that?
(Mr Stevenson) It is the task of animal welfare groups
now to sensitise the public—also when it comes to cakes,
biscuits or ready made meals—making sure that they are asking
for products which contain non-caged eggs. I think we could achieve
that just in the way we have done that with the more obvious sector
of the table eggs.
(Mr Bowles) You pick on a very good point. The whole
argument about whether the EU should go battery-free was not about
imports of shell eggs but the imports of processed eggs. This
shows the limitations that can occur sometimes with labelling.
Not only have you got confused labelling with eggs in the stores,
at the moment, because you do not have a mandatory egg labelling
scheme; but also the public, when they are buying processed eggs,
are one stage removed from that actual product. That is why it
is quite exciting that Freedom Food is now going into processed
meat products because we are trying to develop that particular
market.
186. Would you have labelling on processed products
as well?
(Mr Bowles) Yes, exactly.
187. That is your position?
(Mr Bowles) Yes.
Mr Jack
188. The heart of this matter is the ability
to differentiate between animals raised in one regime as opposed
to, shall we say, a lesser regime, whatever we define as animal
welfare. The determinants in trading terms as to what reaches
the shores of this country and the sourcing thereof is the leading
food retailers, the manufacturers, and the caterers. What discussions
have you had with them about these issues in the context of the
WTO? Do they show any sort of cognisance of the problem? Do you
believe that they are really interested in imposing or ensuring
that there is an equivalence of standards between their overseas
sources of raw material and the United Kingdom?
(Mr Stevenson) We have regular discussions with all
the major supermarkets and the caterers, but particularly the
supermarkets. We lobby, push, persuade them to try and ensure
that they have certain standards for all their current products.
Particularly obviously when it comes to pig meat, we have put
a lot of pressure on them through surveys and publicising the
results, to make sure that all their pig meat—not just their
own labels but the branded products too—are coming either
from pigs from the United Kingdom or abroad but reared to the
same standards; that is, stall and tether free. Clearly the supermarkets
do need pushing and persuading but, yes, they are susceptible
to that pressure of setting high welfare standards.
189. Do you believe there is a real equivalence,
a real parity? For example, chicken from Thailand is one that
currently exercises a lot of people's minds. I have no idea how
Thai chickens are reared, but the supermarkets might argue that
there is an equivalence between that product and the domestic
product. Question mark: is there?
(Mr Stevenson) We are currently doing investigation
into some of the developing countries, including Thailand. Hopefully,
we will know a lot more when that study is completed in a month's
time. However, I would imagine that broiler production will tend
to be very, very similar world-wide. It is, of all the animal
rearing industries, the one that has the most uniform standards.
Chairman: I think that brings us on quite neatly
to Alan's line of questioning.
Mr Hurst
190. It can be very much a niche interest, to
use a common phrase these days, animal welfare. The Consumers'
Association did not mention the subject when they gave evidence
to us. The Poultry Meat Federation really emphasised more food
safety and animal health rather than the welfare question. The
argument could be put that animal welfare is very much an activity
of a small number of non-governmental organisations rather than
a matter of general interest. Would you care to comment upon that?
(Mr Bowles) There are two things which I would like
to say. One is the link between animal welfare and animal health.
Peter might like to go into that in greater detail, but there
is a large link between good animal welfare and good animal health.
In fact, the problem with the Thai chickens, why we prohibited
the import of those, was, I understand, on animal health grounds.
That is linked in with their method of production. The second
thing I would say is that I have found, during the past year of
working on this subject, that there is an increase in interest
in animal welfare, particularly from producers but also from the
retail outlets. If we look at what is happening in the pig market,
at the moment, the retailers are only sourcing from good animal
welfare pork products on their own brand labels. That is because
they perceive and they actually know that there is a consumer
interest in this area. So I think that it is not just a niche
market. There are large interests in this. Those interests will
grow.
(Mr Stevenson) Certainly when we did surveys leading
up to the Council's decision on the Hens Directive—not just
in Britain but in Ireland, France, and the Netherlands—in
all of them roughly the same proportion of people were saying
that the battery cage system ought to be prohibited by the EU.
There are large numbers of people who are concerned about this
issue. When we were lobbying European Union institutions last
year in the run-up to Seattle—and I am talking about the
Commission, the Council and the Parliament—all of them accepted,
without any difficulty, that this was important. Indeed, if you
look at the various resolutions those three bodies made in the
two or three months leading up to Seattle, they stressed several
things. They said there needs to be discovered an appropriate
balance between trade and non-trade concerns. They expressly defined
non-trade concerns as including animal welfare. This was still
in the days when they hoped progress would be made at Seattle.
All of them said that they believed that the adverse impact of
the WTO rules on animal welfare should be one of the negotiating
points of the EU. The Council of Agriculture Ministers specifically
said that they believed that the "green box" should
be expanded, so that it was absolutely clear that payments to
promote high standards of animal welfare were legitimate "green
box" payments. This was taken on board by institutions representing
all 15 Member States that this was an important issue of broad
public concern.
191. There can be a perception, can there not,
that animal welfare activism is very much for rich city folk,
who may have retired to the country, rather than those who are
actively involved in country affairs or, indeed, those who are
buying food on a balanced budget. That is a perception which might
be there.
(Mr Stevenson) We have never found, in terms of our
support and any questionnaires we have done, any difference between
urban and rural interests in farm animal welfare issues. You talked
about people on a tight budget. One point we have been trying
to research, and the point we have been making over the last two
or three years, is that sometimes the farming industry is, quite
frankly, a little bit naughty in saying that if we change certain
systems—shall we say, going from the battery cage to the
free-range for eggs, or going from stalls and tethers to group
housing or free-range for sows—that this will be extremely
expensive for both producers and for the consumer. I do not believe
that is so. I do not believe that these intensive systems are
necessarily always inherently very much cheaper. If you look at
the industry's National Farmers' Union own figures, a free-range
egg cost just 1.5 pence more to produce than a battery egg. It
really is tiny. I am not talking about the price charged in the
shop. I believe that many shops are over-charging the premium
on high welfare. I am in the middle of doing some research into
pig production costs. This is because probably our biggest campaign,
which is coming up, is to try and get an EU-wide ban on the stall
and tether system. When the European Scientific Veterinary Committee
looked at pig production costs, they found out that one of the
main group house alternatives, the electronic sow feeder, in terms
of capital costs, was cheaper than stalls and tethers. In terms
of running costs, the group-housing alternatives, on the whole—I
am afraid we are back to 1.5 pence—are 1.5 pence more per
kilo of pig meat. Again, an absolutely tiny figure.
192. Leaving aside pig meat for the moment but
going back to battery hens and their eggs, one penny per egg is
a colossal sum of money across an annual production rate of eggs
for one producer.
(Mr Stevenson) The Ministry of Agriculture figures
show that we eat something like 1.8 eggs per person per week;
so again, provided that retailers do not over-charge on their
mark-up, we could change from battery eggs to free-range eggs
at about £2 each per annum.
193. May I ask a question which has always mystified
me and I have never known the answer to. You have discussed welfare
methods. If one method is much more positive in welfare terms
for the animal than another and the consumer knows about that,
I think your argument is that consumers will start to switch to
the welfare-positive product. But if you take the product as a
whole, including those which are not welfare friendly, does it
remain stable as a whole or does it go down? In other words, if
you take pig meat, if you distinguish between welfare-positive
pigs and welfare-negative pigs, does the whole pig meat market
go up or down the more the welfare issue is discussed? Are there
any findings on that?
(Mr Bowles) The pig industry is quite an interesting
question but it is very difficult to tease out certain things
because other issues are happening. For instance, in the whole
pig industry there is no doubt that animal welfare improvements
to stall and tether ban had a cost, but that cost is probably
a third or fourth in the scale of costs that is affecting the
United Kingdom pig industry at the moment: only after BSE controls,
the strong pound, and the collapse of the Eastern European markets.
What you see in the pig industry is that in the bacon products
there has been a large push on high welfare bacon products and
the United Kingdom share of that market has stabilised and has
remained. The amount of Danish imports of bacon has not gone up,
even though the British pig industry in other areas—for
instance, pork meat—is collapsing because the amount of
imports has gone up. That shows that there is a differentiation
in the public's mind. They will go to welfare friendly products
where they know them. You can see that the market in that area
did actually stabilise.
194. Is that a shift within the product market
to the welfare friendly market, (within, say, pig meat), or is
there an increase in the amount of pig meat consumed if you prove
to the public that, in fact, it is produced in a more welfare
positive way?
(Mr Bowles) What happened with pig meat is that there
was a shift, certainly in Denmark, where the farms in this country
were demanding welfare friendly pigs, and the Danish producers
had to shift to stall and tether ban production methods. Otherwise,
they would not sell their pork in this country and the United
Kingdom was a very important market to them. It had that positive
effect there. What you are seeing in the bacon market is that
it is increasing in terms of actual sales. The problems of teasing
this out is because pork had an increase in sales anyway as a
result of the BSE. Then beef made a come-back so it is difficult
to say: what are the actual reasons for this? Is it because beef
was making a come-back or were people going for welfare friendly
products?
(Mr Stevenson) A slightly broader thought. Obviously
some of the data is complex and some of it is simply not there
on many of the points that have been raised over the last five
minutes. I would say that most people would accept that it is
important that we, in the European Union, have reasonably high
standards of farm animal welfare. There are sufficient people
who care about that and that should be addressed. Although I have
argued that often the costs of changing from poor welfare to good
welfare are not enormous—I am not pretending there are no
costs and those can be quite crucial—nevertheless, from
our point of view, the conclusion which is reached is that reforms
to the WTO rules are vitally needed, both to protect EU producers
but also to protect the EU's attempts to move to high animal welfare
standards.
195. Both of your organisations highlight conflicts
between EU welfare legislation and WTO rules. How would you see
this situation being ultimately resolved?
(Mr Fisher) Firstly, to wrap up the previous point.
I would say that if you take a completely pro-liberalisation view
of the market and animal welfare, then the very least you need
is much better if not perfect information between consumers. They
need to know about the things that interest them: at the very
minimum, clear labelling and probably some public information.
The discussion we have just had here talks about situations where
there has been virtually no mandatory or even official voluntary
scheme run at a governmental or European level. Such schemes as
there have been have either been run by retailers or animal welfare
organisations. We are at a very immature stage in the labelling
process, so it is not entirely surprising that consumers are not
necessarily fulfilling all their desires through the market because
they do not have perfect information, leaving aside that they
also have other interests. For example, chicken is perceived as
healthier because it has less fat, so they may have another reason
to buy chicken, although it is not a very pro-welfare point. On
the question of WTO, the key problem is process and production
methods. All animal welfare method issues can be described as
a process and production method; non-product related. I see nods,
so I can see that you are familiar with the jargon. Essentially,
it is very difficult (if not impossible) in most cases, to determine
in the physical product whether it is a free-range egg or a battery
egg. Whether it has been humanely produced or is intensively produced
pork. Therefore, from a WTO point of view, all these products
are the same. They are "like products" and should be
treated the same. So if we are talking about fundamentals, this
is the fundamental problem from the WTO. The WTO has a completely
different mindset, even from the consumers' or most legislators'
mindsets, where at legislative and personal levels we all make
distinctions on the way the products are produced to a greater
or lesser extent. Can this be dealt with at a WTO level? Politically,
at the present time, the answer is a resounding "no"
because there is deep suspicion amongst many countries. If you
allow these distinctions to be made, then all kinds of trade barriers
will be erected. This is partly a matter of convenience because,
of course, we have the WTO Agreement on Intellectual Property,
which does make very similar distinctions between products which
are otherwise indistinguishable. So I would say that where there
is a will there is a way but at the present time there does not
seem to be a will to make distinctions on the basis of PPMs. This,
therefore, leaves us in a situation of: can WTO rules be adapted,
in other ways at least, to make the liberalised market less damaging
to animal welfare goals? This is where we come to the question
of competitivity of domestic producers. It is quite clear that
we have different standards in Europe. Let us forget the developing
countries, let us talk about the United States, one of our major
competitors. The animal welfare standards are startlingly different,
for the most part, particularly in farm animal welfare. How do
we deal with these differences? "Green box" payments
have already been cited. This seems to be politically the most
acceptable way in WTO terms, although it may not be acceptable
to the Chancellor or to the European Union because it may involve
extra costs. Labelling is another but we have dealt with labelling
in so far as, at best, labelling will be complementary. It will
not be a complete solution. I do not think labelling would be
proposed as a total solution in other areas such as the environment,
for example. It adds value to the policy objective but it does
not usually produce the whole process. Therefore, we are faced
with fundamentals of the WTO which is: can we make distinctions
on PPMs? Are there general exceptions to the WTO rules applied
in such a way that they will be helpful to animal welfare? Answer:
probably not, based on the panels there have been so far. If the
mindset cannot be changed easily or quickly, which it probably
cannot, we have to move to more pragmatic ways of dealing with
the problem—"green box" payments, labelling, or
some other kinds of border adjustments—which are at least
non-trade distorting to WTO partners.
(Mr Stevenson) At the risk of repeating myself, from
the animal welfare point of view, which is so much at the core
of our concerns, if I was allowed to say only one thing I would,
as Chris Fisher did, talk about the real importance of trying
to make some sort of progress on WTO attitudes to process and
production methods. It is where all our problems stem from because,
as Chris Fisher said, virtually every animal welfare concern is
about the way in which the animal is treated and not the end product.
I think the WTO attitude to PPMs has become unrealistic and absurd.
It started off from a principle that imported products should
be treated no less favourably than the domestic ones. We have
now arrived at the point where the EU can ban, say, the battery
cage, but it cannot ban the import or marketing of battery eggs.
Therefore, it can ban the battery egg in the EU but we have to
treat the imported battery egg as favourably as our own free-range
egg. We cannot distinguish between them. So we have now got to
the point where the imported product has to be treated more favourably
than the domestic one because of the PPM rules.
196. Is not the root of the problem that there
are no common universal standards and views about animal welfare?
Therefore, however perfect it may be, the only way you could move
forward to a more universal concept is through the WTO?
(Mr Stevenson) What I believe is that there is a way
of making progress, if the political will is there, on PPMs. I
believe it would not be unreasonable to say to the WTO: let WTO
members be able to make PPM distinctions in their marketing or
import regulations subject, of course, to certain provisos. That
they are non-discriminatory. That they are not disguised restrictions
on trade. That they can be supported by sound science. It is not
some arbitrary or whimsical distinction. That the PPM distinction
being made is one of substance. In other words, we are not talking
about some little technical difference. We are not saying, "We
allow 450 square centimetres and you only allow 400 so we will
ban your import." It has to be something of substance. "We
have banned the battery cage, you have not, we do not want battery
eggs." When making your PPM distinction, you would have to
show that this is supported by the public in your jurisdiction,
through opinion polls or whatever. There is a strong ethical mood.
I believe a way forward could be made on PPMs. The other thing
I want to emphasise again is the importance of getting clarity
into the "green box". We were enormously heartened when
last week the Minister of Agriculture, for the first time, started
to talk about public money being used to help producers move from
intensive to more humane systems. That is permissible under the
Rural Development Regulation. The query is whether it will be
challenged under the "green box". The "green box"
does not clearly allow payments to promote high welfare.
(Mr Bowles) There are two points to pick up on your
multilateral question. The first is that there are common standards,
obviously both within the 15 countries of the EU, but also within
the 30 or so countries that are signed up to the Council of Europe
standards on the Convention on Farming and the Convention on Transport.
The second point is that even if there was a common standard on
certain animal welfare standards, which was recognised as a global
convention, for instance, it would be a bottom line. It would
not solve the fundamental question which is: if the EU wanted
to raise its standard above that bottom line, would it run into
the same problem as we are talking about now?
Mr Jack
197. If I was responsible for food exports from
a less developed country, and I heard what you said; and I said
that I produce an indistinguishable product from the one that
you do in Europe, but I cannot implement your so-called high welfare
standards because it will make life more difficult for me and
my people will suffer, who comes first? The people or the animals?
(Mr Stevenson) The developing country who said, "We
cannot afford your standards," I do not believe that is a
problem. Of course, we are sensitive to these concerns. Most people
who support animal welfare organisations are the very same people
who are concerned with developing countries. But first, as I said
earlier, often the cost differences are really tiny. Secondly,
remember we are not saying to the developing country that we will
not import your eggs unless all your egg production meets our
standards. What they do with their egg production for their domestic
market or other export markets is their business. We are saying
that the bit of their production which comes to us, we want it
to be to the standard which we would insist on in our own territory.
That should not be a problem. I am not aware of a single country
in the world that has all of its egg laying hens or pigs in the
same production system. Even in the most intensive countries,
say France, you will get some very good free-range pigs and chickens.
This applies world-wide. So one is merely saying to the developing
country who want to export to the EU, "Please bring your
exports from your free-range systems or non-intensive systems."
I do not believe it is a problem in practice.
Mr Mitchell
198. We have come on to the WTO and Millennium
Round negotiations. Effectively you are saying that to achieve
better animal welfare you are prepared to strike a major blow
at Britain's competitive situation of, say, egg producers by the
caged bird restriction, which will effectively, from 2010, ban
caged birds. Now that does pose a unique problem for this country,
which does not affect many other countries. Firstly, our scale
of production is higher, so that ban is going to be a more serious
blow against the industry. Secondly, we are a crowded island and
do not have space for the kind of free-range or barn production
that will be substituted. Think of the planning nightmare that
poultry producers are going to face if this comes in.
(Mr Fisher) You have to accept, in the first instance,
that this is really the philosophy of the WTO, which they would
happily accept. They advocate the idea of competitive advantage.
If space was an advantage for a particular country in egg production,
therefore, they should be allowed to exploit that egg production.
We do not take that view. We think there is a case for being able
to produce eggs closer to home and to the standards you prefer.
The question is then: how can we deal with that in the context
of a liberalised system? I do not think any of us advocate the
idea that we just force up standards domestically and to hell
with the consequences.
199. You are prepared to impose a major blow
on British production, are you not?
(Mr Fisher) No, I do not think so at all.
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