Select Committee on Environment, Food and Rural Affairs Appendices to the Minutes of Evidence


Memorandum submitted by the RSPCA (A14)


  1.  The RSPCA welcomes the opportunity to give evidence to the Environment, Food and Rural Affairs Committee on the future of UK agriculture. The Society has been deeply concerned by the effect on the farming industry by the foot and mouth disease outbreak in the UK. However it feels that this provides a welcome opportunity to reassess the future direction of British agriculture. The Society has drawn up its own Ten Point Plan for sustainable welfare-friendly agriculture which it believes provides a good foundation for British farming. Furthermore it welcomes the establishment of the Policy Commission on the future of farming and food, to which it has already given evidence. Whilst being disappointed the Government did not see fit to have an animal welfare expert on the Commission, despite animal welfare being one of three issues mentioned in the Commission's Terms of Reference, the RSPCA believes the Commission can set down a blueprint for farming in the 21st century.

  2.  In addition to the broad changes that the Commission and Government can and should recommend and implement, there are a number of legislative opportunities that present themselves at this time. These will be examined in turn. The World Trade Organisation officially sanctioned the continuation of talks on the liberalisation of agriculture in Qatar last month and set an optimistic time frame of three years for the talks to be concluded. Secondly there will be a review of the CAP in 2002 and finally there are individual legislative opportunities that have an effect on the improving farm animal welfare standards. Changes to the farming methods for pigs, laying hens and veal calves are all due to come on stream in the next three years as well as the issue of transportation of animals; improvements to European farming methods may be discussed in other farming areas such as broiler chickens and beef and dairy cattle.


  3.  The relationship between measures to raise standards on the protection and welfare of animals and the multilateral trading system is becoming increasingly important. Measures taken to protect animals from cruelty and extinction have been at the forefront of national legislation whose legitimacy has been questioned in the context of the rules of the World Trade Organisation (WTO).[12] As a result, both new and existing measures to protect animals are being adversely affected, even when it is recognised that such measures are genuinely motivated and not taken to obtain a domestic trade advantage.

  4.  The WTO will therefore either be faced with dealing with an increase in animal welfare disputes or will be castigated as the reason why standards do not continue to rise. In situations where additional costs resulting from the increase in standards can be distributed equitably throughout the market place, then the policy goal of improved animal welfare or conservation can be achieved. However, if undue emphasis is given to the benefits of trade liberalisation, then the non-trade benefits of such policies may become difficult or impossible to realise.

  5.  An increase in standards and legislation has ensured that the EU has some of the highest farm animal welfare standards globally. Although it has been consistently stated that nothing in the WTO rules prevents a country from raising its own welfare standards, there are two important consequences that can occur if standards are raised:

    —  the cost of the product increases, leaving the country and its producers who use the higher standard at a price disadvantage compared to imports produced by less humane methods.

    —  the goal of raising animal welfare standards is closely linked with non-product related process and production methods (PPMs); meaning that distinctions between products based upon methods of production is currently highly constrained under the WTO.

  6.  In almost every animal welfare case likely to be of relevance to the WTO, the measures concerned will deal with aspects of the production process eg the method by which an animal is reared, transported or slaughtered. Typically, there is no observable trace of these production process in the final product to be traded (a non-product PPM). An egg produced by intensive farming systems will look the same as one that is produced free-range. A potential conflict occurs where a WTO member wants to prohibit or regulate agricultural imports on the basis of a production method considered to encourage poor animal welfare, particularly if those methods are already prohibited domestically.

  7.  Although such production processes are of increasing importance to consumers and policy makers in many countries, current WTO practice limits distinctions between products based upon the methods by which they are produced, unless such methods change the character of the product in a way which is detectable compared to other similar products. It is generally presumed that product distinctions based on such PPMs conflict with Article III of GATT 1994, although there is less agreement with regard to measures, such as labelling, covered by the Agreement on Technical Barriers to Trade (TBT). So at present, WTO rules will typically require products such as eggs to be treated as "like products", irrespective of how they were produced. Laws based on PPMs are likely to have to rely on the Article XX exceptions if they are able to comply with WTO rules.

  Although the animal welfare standards of the EU are typically higher than its competitors, they are still unsatisfactory and in need of improvements.[13] The cost of improvements made so far in the EU have effectively been born by producers and consumers, with almost no specific EU payments to support animal welfare measures. This approach may not be viable in a more liberalised market, and could cause a downward pressure on farming standards or require the EU to consider increasing financial support for welfare measures. Even if the EU was willing to provide such support it is still unknown if such measures could be justified under the Agreement on Agriculture.

  Unqualified further reductions in tariffs, together with improved market access, therefore pose a potential threat to animal welfare policies within the EU. In the first instance this is likely to slow down the pace of domestic reform ultimately leading to stagnation or even reversal. Livestock farming represents approximately half the value of all EU agricultural production and one third of the total economic support for agriculture.[14]

  8.  The EU has recognised this problem and has proposed three solutions at the WTO to ensure that animal welfare standards can be maintained and improved and that high welfare producers will not be penalised by being undercut by cheaper imports. These solutions, (mandatory labelling; providing subsidies to farmers that produce goods to high welfare standards and ensuring that these qualify under the Green box of the WTO; multilateral agreements) have been discussed under the Agreement on Agriculture (AoA) negotiations but have met resistance from other WTO Member States, notably the Cairns Group. The Doha Declaration that started the new Round of trade negotiations agreed that animal welfare can continue to be discussed as part of the AoA talks.

  9.  The Doha Declaration also agreed that subsidies on exports should be phased out and that market access opened up, by reducing tariffs. These have important implications on the future for British agriculture. The EU views the three pillars of WTO agricultural reform (export subsidy reduction, improved market access, solutions for non trade concerns such as animal welfare) as of equal value. However, other countries do not see non-trade concerns as important to trade liberalisation. It is difficult to see how higher European animal welfare standards could be maintained or improved if tariff reduction continued to occur with increased market access but no corresponding solution was implemented for high welfare producing farmers such as compensation payments or border adjustments.

  10.  The EC egg production reform provides a clear example of why animal welfare concerns need to be addressed as part of the WTO negotiations. The RSPCA in its report Hard boiled reality underlined that higher welfare in this instance indisputably means higher costs to producers. This analysis suggests that by 2012 there will be a substantial difference between the EC and the USA, a major competitor. At current prices, a dozen eggs will typically cost 73 cents to produce in the EC and 42 cents in the USA. US egg producers could therefore theoretically export fresh battery eggs to the EC and still, even with import duties and the additional transport costs, sell them at lower prices. They would be even more competitive in egg products. After standardising other inputs, the amount attributable to animal welfare standards could be as much as 20 cents per dozen, also two-thirds of the total difference.

  11.  Unless EC producers receive some additional support, an unintended consequence of raising welfare standards in the egg sector could be a substantial loss of market share to imports from producers in third countries with significantly lower welfare standards—even lower than current EC standards. This could undermine the intended effect of the welfare reform and cause a substantial reduction in domestic production.

  12.  The extent to which measures to promote animal welfare are covered by the existing "blue" or "green" boxes is unclear. It is therefore important to ensure that, in future, payments to support animal welfare can be made and are exempted. One possibility would be to include a new animal welfare clause in Annex 2 of the AoA similarly worded to clause 12, or alternatively, to amend clause 12 (a) to read ..."environmental, animal welfare or conservation programme...". In some cases, it will also be possible to support animal welfare objectives under the existing de-minimis percentages. However, the right to provide exempted domestic support, will not automatically mean that animal welfare will be assisted in this way. For this reason, it is also vital that negotiators consider the likely impact of further liberalisation and ensure that appropriate mechanisms are available and depolyed to rectify any adverse non-trade effects likely to result from tariff reductions or improved market access.

  13.  The RSPCA support the phase out of export subsidies, particularly for live exports of animals. Recent discussions within the Agriculture Council show there is some support for ending export subsidies for live animals although sharp resistance remains from certain Member States. Approximately two to three per cent of EC egg production is exported and attracts export subsidies. These cover the difference between EC and world market prices. Mainly processed eggs are exported, principally to Japan, Switzerland and countries in Far-East Asia, Russia, Africa and the Middle East. The EC accounted for 25 per cent of 1997 world egg exports. Subsidies and other forms of support for exports are often justified as a way to offset extra costs faced by domestic producers, which make them unable to compete in the global market. This may be true in some cases, but it is not necessarily a good justification or wise use of public finances. It may be necessary to adopt measures to prevent trade undermining domestic production standards, but this approach loses credibility if the same national products can penetrate other markets through export subsidies. Though domestic support and export subsidies may produce similar results, the latter are undoubtedly more trade distorting, especially as they can undermine domestic producers in third countries, who might otherwise be able to produce profitably for their home market. It is generally better to convert export subsidies into direct payments that support non-trade objectives such as animal welfare.

  14.  Tariffs offer a somewhat blunt instrument for ensuring domestic producers are not exposed to third country producers with lower production costs. They shelter producers from a wide range of cost differences, such as feed, labour and welfare. Welfare costs could require a tariff of 5-20 cents per dozen eggs to offset the increasing costs of EC egg producers between now and 2012. Currently, the difference between EC and US egg producers is approximately 16 cents per dozen. The current tariff is 21 cents per dozen and likely to fall. Therefore, unless tariffs are increased in future, which is unlikely, tariff protection will not be sufficient to cover any additional welfare costs. The degree of tariff protection available will however affect the amount of other types of support required to compensate for additional welfare costs. Another problem is that tariffs are currently applied indiscriminately. The same tariff is applied even when the exporter conforms to or exceeds EC welfare standards. If a degree of tariff protection were implemented on the basis of differing welfare costs, it would be fair to also allow compliant producers in third countries to pay a lower level of duty. This could perhaps be achieved through bilateral agreements with countries with comparable national welfare standards. Alternatively, individual producers could benefit from a reduced tariff rate quota, established on the basis of eggs produced in conformity with EC minimum standards. But such a targeted approach to tariff application—even though it could promote both social and economic objectives in tandem—is not currently favoured in the WTO.


  15.  The RSPCA welcomes the mid term review of the CAP. It feels that the Berlin agreement on the Agenda 2000 proposals was a lost opportunity. Although the objectives laid down to reform the CAP were hopeful, particularly that environmental goals be incorporated into the CAP and that it should guarantee and improve food safety and quality, the final result was very disappointing.

  16.  The Agenda 2000 package keeps many subsidies that are in place to promote production, which will encourage intensive farming and by implication welfare problems. In particular the decision to put off dairy reform until 2005 keeps the dairy policy as it is and encourages high yielding dairy cattle farming with its welfare issues. The package also does not fulfil the promise of developing the multifunctionality of the CAP by making environmental payments mandatory. The Commission desire to move towards an agricultural system where prices are closer to the world market level and thereby losing such things as export subsidies, was also not realised, although the AoA negotiations may force the pace of this reform faster than originally envisaged by Member States. Agenda 2000 did at least incorporate more fully the concept of the second pillar of payments within the CAP and ensured that good environmental practices were rewarded, albeit mainly on a voluntary level. The RSPCA believes that the mid term review should extend this policy to rewarding good animal welfare practices.

  17.  In February 1998 the RSPCA produced the report "Agenda 2000—the future for farm animal welfare in the European Union?". This outlined the animal welfare consequences of the Common Agriculture Policy, focusing on the three livestock regimes of beef, dairy and sheepmeat. It set out suggested amendments to the CAP that would both reduce the consequences of those policies that had a negative effect on animal welfare and promote an improvement in welfare standards. Many of these amendments have yet to be implemented so the CAP remains a system that encourages intensification through direct price support, whilst not rewarding good welfare practices.

  18.  The RSPCA recognise that the AoA negotiations will increase the pressure on the Member States to reform the CAP to reduce price support and phase out export subsidies. However whilst the Commission is promoting and lobbying for the acceptance of Green box payments to reward higher welfare concerns within the AoA talks, it has still to propose systems under the CAP that would underline this position. For instance the national envelopes for beef and sheep that give Member States the opportunity to divert finances into second pillar subsidies do not explicitly mention that it covers animal welfare as well as environmental payments. Similarly cross-compliance payments have been interpreted narrowly to only mean rewarding good environmental practices.

  19.  The RSPCA believes that an animal welfare impact assessment should be undertaken on all policies and payments of the CAP. An EU wide system of minimum welfare standards should be established, to be developed as a Code of Good Practice (similar to the existing DEFRA codes of practice but with a mandatory compliance structure). This would then be used by Member States for cross-compliance with existing relevant direct payments.

  20.  The RSPCA feel that an increase in extensification payment in the beef sector should be made both as an indication of the importance of extensification and as a broad acceptance that a reduction in stocking densities could raise the level of animal welfare as long as good management is also in place. Methods should also be looked at to encourage the uptake of the premium in particular make payment on the stocking rate of animals for the total number of animals on the farm, include penalties for high stocking rates and set a system of graduated levels of payments which increase as the stocking density decreases.

  21.  On export refunds, Regulation 615/98 was put in place to only give refunds when EU welfare rules were followed and it could assist in reducing welfare problems for export refunds of live animals. However it is totally dependent on effective enforcement which is likely to be difficult. As a result RSPCA recommend that only a complete prohibition on payments for the export of live animals will provide the necessary financial incentive for a carcase only trade. Discussions on this proposal are continuing within the Farm Council.

  22.  The intention of the EAGGF Agenda 2000 policy is to bring together all payments and measures related to the development of the countryside. It also adds in certain measures to link the proposed direct payments under the livestock regimes to good environmental practices. Although this proposal is aimed at promoting low-input farming and encouraging agricultural methods that are compatible with the environment, the real challenge to use this proposal to increase animal welfare-friendly methods of farming remains. Thus it was disappointing that the encouragement of the improvement of animal welfare was still not designated as one of the objectives in the preamble paragraphs; although it does appear as an objective in the measures to support investment in agricultural holdings and for training. Member States such as the UK have stated that animal welfare standards can not be applied to horizontal measures such as cross -compliance, making it difficult to encourage higher welfare standards as part of the subsidy programme. Animal welfare is mentioned specifically under Article 33 as one of the areas where support should be granted for to promote the adaption and development of rural areas but it is uncertain how such payments will operate under Member State direction. The RSPCA believes that the mid term review provides the opportunity to divert finances from direct support into payments encouraging better animal welfare. Indeed if the Commission is to be consistent in its approach on animal welfare as a non-trade concern at the WTO and with the CAP, there is a real need to implement these changes as soon as possible.

Promotion of Better Stewardship

  23.  The RSPCA has made specific recommendations in its submission to the Policy Commission on the Future of Farming as to how better stewardship can be promoted. It believes that the only way to ensure compliance with minimum standards on farm is to license all livestock units. Attainment and retention of a licence should be conditional upon achieving and maintaining welfare standards, as assessed by an official inspector. Such a system would not only ensure that every livestock producer is visited and assessed, but would also be a meaningful deterrent to bad practice.

  24.  The RSPCA believe that demonstratable stockmanship competence should be an integral part of farm management. Newly agreed amendments to the pig Directive (91/630/EEC) and the transport Directive

(91/629/EEC) both have requirements on training to ensure that the person has been given specific guidance and instructions, focusing on welfare aspects. Lack of effective knowledge is a barrier to improving stock-keeper skills and hence animal welfare.


  25.  As trade in agricultural products becomes more liberalised it will be important to ensure that welfare standards can continue to be improved within the EU without loss of competitiveness. To achieve this it may be necessary to either make appropriate border adjustments or to enable payments to be made to producers—both options may require revisions to the existing WTO rules and will need to be discussed in the AoA agriculture negotiations.

  26.  Other forms of non-discriminatory measures could help to facilitate trade in high-welfare products,

eg through preferred market access schemes, import quotas and preferential tariffs. Thus, future liberalisation could be used to promote trade and animal welfare—the so-called "win-win" solutions. Phasing out export subsidies and re-directing these to support animal welfare and other non-trade objectives could yield similar benefits.

  27.  The review of the CAP provides the opportunity to divert finances from direct support into payments encouraging better animal welfare. Such an approach would be consistent with the approach delivered by the Commission in the AoA discussions.

  28.  The opportunity presented by Foot and Mouth Disease to review British agriculture should be grasped and new thinking developed by the British Government to encourage better animal welfare practices. The British Government has long been a champion of reform of the CAP and in particular diverting resources away from direct subsidies. The British Government is also committed to further trade liberalisation and has long been an advocate of improving animal welfare. This submission shows that the latter two points could be incompatible without proper safeguards. Ensuring both can co-exist and promoting a higher welfare CAP is one of the main hurdles to overcome when discussing the future of UK agriculture.


13 December 2001

12   Council Regulation 3254/91/EEC, Official Journal of the European Communities L308/1-2 (1991) aimed at implementing a prohibition on imports of furs caught in leghold traps to bring imported furs in line with the standards, operating in the EU, which banned the leghold trap from 1995. However, following fears of a WTO challenge, agreement was struck in 1997 with USA, Canada and Russia, the main fur exporters to the EU, to allow them to continue to use the leghold trap. Under Directive 93/35/EEC on the approximation of the laws of the Member States relating to cosmetics products. (Official Journal of the European Communities L151/32-36. 1993) a marketing ban on imports of cosmetics products tested on animals where there are alternatives was approved to be implemented from 1st January 1998; it has yet to be implemented, again due to WTO fears. Back

13   Animal Welfare in Europe, Ed. Wilkins, D.B., Kluwer International Law, London, 1997. Back

14   Anon. 1997 Economic Activities, Agriculture-Final animal output, million ECU, Eurostat, European Commission, Brussels 1999. Back

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