APPENDIX 12
Memorandum submitted by the RSPCA (A14)
INTRODUCTION
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.
WORLD TRADE
LIBERALISATION
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.
COMMON AGRICULTURAL
POLICY—MID
TERM REVIEW
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.
Conclusions
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.
RSPCA
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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