Examination of witnesses (Questions 200
- 219)
TUESDAY 21 MARCH 2000
MR PETER
STEVENSON, MR
DAVID BOWLES
and MR CHRIS
FISHER
200. That must be true.
(Mr Fisher) No, no, because we are spending all our
time arguing, at the present time, that there needs to be some
form of adjustment. We cannot just pursue a policy of liberalisation
without taking account of the consequences of other policy measures,
of which animal welfare is one. This was one of the things which
very much came out of the Uruguay Round. There was a strong political
desire to reach a particular conclusion. There was a lot of detail
that nobody, with the best will in the world, could ever have
considered. Animal welfare was just one of those consequences.
What we can say is that when we go into a new round of discussions,
particularly when you look at such things as tariffs, in the case
of hens the European Commission did quite a reasonable study of
the extra cost to producers; what the current rates of tariffs
were. There will be a responsibility on the negotiators to ensure:
one, that they either find some other mechanism whereby we can
maintain our production systems; or, two, at the bottom line,
if they cannot find another way, not to reduce tariffs so low
that their own producers then become exposed to unfair competition
in third countries. So we really are not saying that we should
just open the floodgates and let all our producers go to the wall.
No, that is not what we are saying.
201. Mr Stevenson wants to come back. He gave
us a Panglossian interpretation of the power of science. We can
invoke good science to distinguish between, say, powdered eggs
coming from the United States producers, produced by a more expensive
system; and powdered eggs produced by the British industry under
a less expensive system. That must be rubbish.
(Mr Stevenson) What I was arguing is that where there
is a sound science distinction to be made—which I think
there clearly is between battery cage and non-caged egg production—then
the WTO member, in our case the EU, should be able to make that
distinction between shell eggs or powdered eggs. Going to your
point about wanting to strike a blow to the United Kingdom egg
industry, that simply is not true. For a start, it is an EU-wide
measure. It is not a United Kingdom lone measure. Secondly, as
I have said earlier, I believe that producers should be helped
with the capital costs of change under the Rural Development Regulation.
The European Commission itself said that, when it first made its
proposal in 1998. The Minister of Agriculture is clearly beginning
to look at that possibility. You must also remember that the longest
a battery cage system will last, the very longest is 20 years.
The industry has been given 13 years for the phase-out. Therefore,
65 per cent of systems will come up for renewal anyway during
the phase-out period. At that point it is probably cheaper, (or
as cheap), to install a barn system or free-range as to buy a
whole set of new cages. I do not believe there is a land problem
at all. That is a very naughty myth spread by the industry. In
the period shortly after the Second World War there were probably
twice as many more hens in this country as there are now, virtually
all of them—probably 98 per cent—kept free-range.
There was no land problem. The number of hens was significantly
higher.
202. People kept hens in their back garden in
the war.
(Mr Stevenson) No, I am talking about on farms. I
assure you there is not a land problem.
203. But what about the planning? That cannot
be right.
(Mr Bowles) There is a planning permission problem.
We would accept that. At the moment there is a blockage with the
planning permission. That is something which needs to be looked
at.
Mr Paterson
204. Mr Mitchell has hit on something which
is extremely important. I would like to invite you to a farm in
my constituency, where there are 1 million hens producing 700,000
eggs a day, in which £1 million has been invested every year
within the last ten years. It is as high a standard as anyone
could find anywhere in the EU. If the Directive is imposed in
this country—and this is a very enthusiastic farmer, by
the way—he is convinced it will not be imposed on other
nations. He will have to reduce the capacity of his cage by 20
per cent or build 20 per cent more buildings and cages. He is
convinced that he will be rendered less competitive by 20 per
cent than his European competitors. He is also trying to compete
with egg plants in the States where I know of one—11 operatives
looking after 6 million hens. It works both ways. You just blandly
say there is plenty of room in Shropshire for him to spread them
all out in open sheds, as you have just said to Mr Mitchell, but
that is just not being realistic.
(Mr Bowles) There are two points. One is the fact
that there will be a level playing field between the United Kingdom
and the EU, so you will not be undermined by your European competitors.
205. He is convinced that the Directive will
not be brought in, in other countries, as swiftly.
(Mr Bowles) That is an enforcement point.
Mr Paterson: Exactly. So he will be 20 per cent
less competitive. Behind that there is the real horror of American
competition. Just to say that people can gaily go out and build
a mass of sheds all over Shropshire is not being realistic at
all.
Chairman
206. Before you reply, let me recall that we
are discussing the WTO. Let us stay within those confines a little
bit.
(Mr Stevenson) As David said, on the EU side, that
is a matter of EU enforcement. It would help enormously if this
Committee could put some pressure on the European Commission to
employ more enforcement officers. I really mean that seriously.
That is where the problem comes from. On the WTO side, of course,
I recognise there are very serious potential problems. It is why
I have come here and have argued, and have argued in the written
evidence, that we need reforms to the WTO rules in order to make
sure that the EU can make progress on farm animal welfare without
our producers being undermined and our welfare standards being
undermined. I said earlier that the kind of progress I am looking
for is partly progress on PPMs and partly in terms of "green
box" payments. I believe we also need reforms of the Article
XX General Exception. This is a really vital point with the new
negotiations on the Agreement on Agriculture. The Ministry of
Agriculture consultation document published last year said that
import tariffs, even after their reduction over the last six years,
are still at a level where we can keep certain imports out if
we wish to do so. We really must not go into this new round of
the EU Agreement on Agriculture negotiations, allowing import
tariffs to be reduced further, unless our WTO partners give us
some sort of mechanism that, in practical terms, does allow us
to keep our high welfare standards without our industry being
undermined. So, yes, there is a problem. Yes, I am saying we need
to reform.
Mr Mitchell
207. You do not want to cast doubts on the European
Commission because they are now your friends and allies. You are
working together. Indeed, the EU pushed for the inclusion of animal
welfare on the agenda at Seattle, but it did not find much support
for that position and the current negotiations for Article XX
do not make any specific mention of animal welfare. Do you think
that animal welfare will be included in the mandated talks on
agriculture?
(Mr Fisher) The answer is absolutely yes. Particularly
after Seattle, where no agreement was reached, we have now proceeded
on the basis of the Article XX Agriculture Agreement, which clearly
lays down within its own text that non-trade concerns can be taken
into account when considering these issues. The issue is not whether
the issue can be addressed, but how the EU trading partners will
respond to the issue when it is raised. I have held numerous discussions
already, in Seattle and Brussels and elsewhere, with some of the
trading partners. The problem is not fundamentally of animal welfare.
Many of these countries do have animal welfare concerns of their
own—even the United States to some degree—but they
are very doubtful of the Commission's motives. They see animal
welfare as just another reason for the EU to maintain its protectionist
policies.
208. Are they right on that?
(Mr Fisher) They could be. It is our job to make sure
that this is not used. For example, let us talk about multi-functionality.
We consider animal welfare is very much a part of multi-functionality.
We do not see multi-functionality as a way of supporting the existing
CAP. Really, multi-functionality, if applied in an even-handed
and progressive way, would be about reforming the CAP. There may
well be some discontinuity between what the Commission would like
to present as various issues and what may be its ultimate motive.
This is a problem for us because we do not want to be dragged
along as an excuse for maintaining a system which does not help
animal welfare in its present form. Therefore, we need to unpick
this. This is why we are in detailed conversations now with the
Commission as to how they are going to go forward on this issue.
They have not yet come forward with any concrete proposals. Some
discussion on the "green box" has begun to be floated
by Commissioner Fischler. There has been some discussion on labelling.
However, they are very reluctant to come forward with an egg labelling
proposal, which would be quite an interesting and innovative test
case. So we do still have some way to go. If you look at Seattle,
as a whole, there were many countries opposed to the environment
agenda or the labour agenda. It does not mean that these things
should be abandoned but what is clear is that countries will oppose
them, sometimes for fundamental reasons, but more often for purely
political reasons. They want to get something else back from the
negotiations. So the fundamental question for the EU is: what
are you prepared to give in order to get?
209. That is right. What concessions should
they be prepared to offer to get animal welfare included?
(Mr Fisher) We have argued very clearly in our paper
that the approach has to be entirely consistent. It does not necessarily
follow that if we support, (as we do), methods to support farmers,
to ensure that our production systems can be maintained and hopefully
improved, that if you can show that an Argentinean beef farmer
or an American chicken farmer can produce products to equally
good welfare standards—possibly even better welfare standards—that
should not be used as a reason to keep those products out of the
market. On the contrary, what we have proposed here is a more
progressive way. Unfortunately, one which is at the present time
barred under the PPM problem, is that you can gear your trade
policy towards producing the so called win-win outcomes. If you
liberalise the agricultural policy and frontload it so that you
give preference to those producers which produce in accordance
to high welfare or high environment, then you can increase trade
and you can increase the other social and environmental factors.
Another area that we have been quite strong on is export subsidies.
We do not see how it is possible for the EU to maintain its position
on export subsidies. At the very least you have to reduce these
and, hopefully, we would say that some of the money saved as a
result of that can be helped to fund some of those other objectives
such as animal welfare. In this sense we are a little bit apart
from the Commission because they have not come quite that far
yet.
210. You might be a little naive in your faith.
Multi-functionality is in the eye of the beholder. Do you think
they will make concessions in order to secure animal welfare gains?
(Mr Fisher) I cannot say for sure that they will but
I think they are going to have to. Commissioner Fischler has already
demonstrated to accept the "green box". That is something
new. But he knows very well that there is not any money in the
CAP, as it is constructed for him, to suddenly find money for
animal welfare. The money has to come from somewhere else. To
be blunt, we have to put the question to the United Kingdom Government
and other governments, whether they are prepared to consider this.
We have seen that our own Minister recently has begun to flag
up this idea. Our bottom line really is that the WTO agreements
have been entered into. There are clearly now costs for animal
welfare. We were not discussing this with Parliamentarians five
years ago. Now we have a very serious potential problem to the
United Kingdom and European industry. Therefore, as a serious
problem has emerged, a serious policy has to result. There is
usually a price attached to that.
211. The British Government has paid that price
on occasions. Again, it is permissible to be suspicious of the
EU motives in terms of finding another argument for protectionism,
given that their record on animal welfare measures has not been
as good as this country and you, yourself, say in your evidence
on stall and tether production that they were very slow to do
anything about it. They are still not coming forward. We are still
imposing extra costs on our farmers by banning that method of
pig production. Its record on animal transport has been pretty
shabby, in my view. There was a long argument over veal crates.
The EU is not at the forefront of animal measures and yet now
it is your ally in urging that this should be introduced, as a
consideration, at WTO, to the minds of some of us as a means of
maintaining production.
(Mr Bowles) You should not see the Commissioners as
the EU. The reason why we have higher standards in the EU, and
it is important to stress that these are higher standards in the
EU than virtually elsewhere, the reason why we have those is because
individual governments have been pushing the Commission to come
up with a proposal which prohibits veal crates and then bans them;
a proposal that prohibits the use of the battery cage and bans
them. It is not the Commission that has been pushing that forward.
The Commission recognises that these have created a problem. They
are faced with three choices. Either the laws, which they have
in place, will have to be weakened, or their producers will go
out of business; or they get a solution to the problem at the
WTO. So the Commission is responding to what the governments have
given them, which are higher standards.
212. Meanwhile, our producers have to go out
of business. British producers are going out of business.
(Mr Bowles) There is only one area, I am aware of,
in the European Union where British producers have current higher
standards, and that is in the pig industry. As I said earlier,
the pig industry is not going out of business, at the moment,
because of those higher standards alone. The pig industry is going
out of business because of other measures: the strong pound, the
BSE controls, the collapse in the Eastern European market, and
the pig cycle all happened at the same time. If you look at the
actual cost implications on the pig industry, animal welfare measures
were tiny compared to what happened to that. They may have tipped
the balance but they were very, very tiny compared to everything
else that happened at that time.
213. Do you judge that the EU has been effective,
in the WTO approach, in promoting your concerns?
(Mr Fisher) No, simply because it started too late,
as far as Seattle was concerned. We spent the whole of last year
lobbying the EU to make sure that animal welfare was raised. In
the end it was only raised in the context of agriculture, although
agriculture is the most important area for us in WTO terms. However,
what I would say, is that once we got to Seattle we were very
pleased with the way the Commission did address this issue. They
did not just drop it at the first available opportunity. They
now realise it is a difficult issue and they realise more than
ever that they are going to have to make concessions in order
to get any progress on animal welfare. I really do not see that
fundamentally it is a problem in so far as the package, even the
agriculture package, is such a big one. Animal welfare is relatively
small beer compared with some of the other things that are going
to be discussed. The question is, if the Commission or the EU
wants to hang on to export subsidies no matter what, then, of
course, gaining ground on animal welfare is going to be much more
difficult. There is a complex mixture of things, which are going
on here, which we are caught in the middle of.
(Mr Stevenson) May I emphasise that as we are going
into a lot of complex things, just how much damage has already
been done and is likely to be done by the WTO rules to animal
welfare. We could still see the Hens Directive unravelled if we,
the EU, cannot make progress at the WTO level. Everybody in this
room, from the point of view of the British pig industry, would
like to see our stall ban becoming an EU-wide measure. The science
from the Scientific Veterinary Society Committee is totally in
support of banning stalls EU-wide. The big thing that might stop
it is EU producers in France, Spain and Italy saying, "No,
we do not want to see an EU-wide ban on stalls because we will
be undermined by imports from third countries," so there
is a major problem there. There are two measures that we have
not mentioned at all this morning, which again have been badly
damaged. Three years ago, 1997, the European Commission put forward
some draft proposals to strengthen the EU Directive protecting
welfare at slaughter—really very good measures that would
have stopped a lot of suffering. The Directive, which was being
amended, was a 1993 one, (ie pre-worries about WTO). It has in
it an Article saying EU welfare at slaughter standards apply to
imported meat as well, that it must come from countries of similar
standards. By the time, three years ago, the Commission tried
to strengthen the Directive, there was such fear about this one
Article in the Directive, which was probably WTO-incompatible,
that they shelved the whole proposal. So because of WTO fears,
reforms that would have benefited slaughter in all 15 EU Member
States, have been put on the shelf, possibly never to return.
Those are vital reforms, which would have stopped huge numbers
of animals suffering unnecessarily at slaughter. Secondly, I am
sure many of you are aware of the huge problem of imports from
Eastern Europe of 100,000 horses a year, mainly coming into Italy
for slaughter: very long journeys, massive well documented suffering.
Because of the WTO rules the EU could not ban those imports. The
Commission is saying, to my dismay, that they cannot even apply
the EU welfare controls in the Transport Directive to those animals
entering the EU in sub-standard vehicles without route plans.
Under EU law, if it was an EU journey, those animals would get
a 24-hour rest period. When they are coming into Italy the Commission
has to observe the legal fiction at the EU border that the journey,
even though they have been travelling 40 hours, has just started
at the border. They are allowed to go through at the border, often
with just perhaps three or four hours' rest. I really want to
emphasise the immense amount of damage being done by the WTO rules
to perfectly reasonable attempts to improve farm animal welfare.
214. Are you confident that you will be able
to include animal welfare as a WTO concern? Is it realistic to
argue, as you do here, that Article XX can be revised?
(Mr Stevenson) Sorry, are you talking about Article
XX, the exceptions or the Agreement on Agriculture?
215. You will want to bring the Agreement on
Agriculture into line with Article XX, will you not?
(Mr Stevenson) Yes. I believe it is realistic. Last
autumn the Council of Agriculture Ministers said, "One of
the key things we will need to be talking about is non-trade concerns
and that includes animal welfare." Yes, I believe we can
make progress on this. In the end, we are going to be tremendously
dependent on the governments of the Member States. We need bodies
such as this Committee to put pressure on our own Government to
say that this is something which has to be taken seriously. That,
as we in the EU negotiate a new Agreement on Agriculture, one
of the things we have to get out of it are some measures that
allow us to maintain our own high welfare standards.
Mr Marsden
216. May I talk about export subsidies. Compassion
in World Farming has said that it: "... believes export refunds
must be ended in the light of the damage they impose both on developing
countries and animal welfare". You cite the example of 500,000
live cattle exported from the EU each year. You argue that this
causes suffering as a result of long journeys, extremely cruel
unloading and slaughter methods. If the EU had an extra half million
cattle available for its own domestic consumption, prices would
end up falling. What do you think would happen to the animal welfare
standards if that was to go ahead?
(Mr Stevenson) Probably the most unpleasant part of
the live export trade is the export of cattle from Germany, Ireland
and France to the Middle East and North Africa. We have taken
a film of what happens to those animals in the Middle East and
it just beggars description. If the export refunds on the live
cattle exports were abolished, then that trade would be significantly
reduced. Clearly we may see, of course, through WTO, all export
refunds go. If we do not, I would be perfectly happy to see export
refunds continue on meat, on beef exports, but if the export refunds
were only on the beef and not on the live, then you would see
the trade shift into a meat form. The more fundamental problem
we have talked about, surplus cattle, has to be addressed through
reform of the CAP. It is utter madness that the EU—year
in, year out—produces huge numbers of unwanted surplus cattle,
and then has to pay vast amounts of taxpayers' money to try to
get rid of the animals by shipping them to the Middle East. Let
us bring the supply and demand of our cattle in the EU into a
proper balance.
217. I accept what you are saying. I accept
that if we could change those rules this would be desirable but
if we cannot change them—and it is always very difficult
to change CAP—then do you not accept that we need to pay
more in order to achieve higher animal welfare standards? If we
allow the scenario where prices continue to fall at a unsustainable
level, we shall find that either animal welfare standards have
to fall or simply that farmers will go out of business.
(Mr Bowles) Yes. This is exactly the point I made
earlier.
218. So, therefore, the argument is to keep
some of those export subsidies in place whilst the actual industry
is in such dire straits.
(Mr Fisher) Not necessarily. It depends how progressive
and how lateral you want to be thinking. If you are thinking that
we have an excess 500,000, that may mean you need to reduce consumption
overall. If you diverted the money that you are currently putting
into export subsidies into allowing some of those farmers to move
to organic beef production, they may produce less beef but they
may get a higher premium. There already seems to be quite a lot
of evidence that demand generally outstrips supply in the EU.
If there was more supply and prices of organic products came down,
demand would go up even further. That is one way in which you
could internalise a problem like that. On this question of export
subsidies generally, and the point made by Mr Jack earlier about
developing countries, which was skipped over, Europe has to be
very clear as to what its position really is on developing countries,
vis a" vis agriculture. Does it want to help them
or not, or is it really only concerned with its own industry?
I suspect it is the latter. Therefore, we have already heard that
the Commission is proposing zero tariffs for essentially all products
of the 48 least developing countries, very few of which can be
and probably would not be wise to be exporting livestock products
as a way of raising funds. How can we help developing countries?
Again, this is where we have to be honest with ourselves. Compared
to 50 years ago, European agriculture is greatly intensified.
It is generally bad for animal welfare. By giving export subsidies
to those kinds of products, in effect what we are forcing developing
countries to do is to intensify in order to be able to compete.
Not only that, but probably to intensify further to be able to
offset some of the extra supports that we get. Some of those issues
are self-destructive policies. Secondly, there is the question
of added value. Many developing countries are major suppliers
of animal feed to the EU. Those developing countries would probably
be better off producing livestock themselves nearer to home and
selling in markets: in their own domestic markets or markets nearer
to them. So there is a whole range of issues here where the EU
has to be honest with itself. Where we can agree, and certainly
I agree with Peter, is that generally speaking export subsidies
contribute very little. The money probably can be spent in a more
productive way which will be better for domestic production and
for other factors such as animal welfare.
219. Can I ask whether the RSPCA or Compassion
in World Farming would like to see an overall reduction in the
Common Agricultural Policy spending?
(Mr Bowles) Shall I start off with that?
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