Examination of Witnesses (Questions 135-139)
MR DON THOMAS, MS LYNDA JAMES, MR REES ROBERTS AND MR BOB BANSBACK
TUESDAY 11 DECEMBER 2001
135. Good morning. Welcome to the Committee. As you are aware, we are following up some of the recommendations that we made in our inquiry into the Crisis in the Welsh Livestock Industry, which we looked at in 1997-98, and I think, Mr Bansback, you gave evidence then?
(Mr Bansback) Yes.
136. Perhaps you could begin by introducing yourselves. We had the Welsh Lamb & Beef Promotions down before the MLC requested to come, so perhaps if you could start first, Mr Thomas?
(Mr Thomas) Yes. Don Thomas, Managing Director, Welsh Lamb & Beef Promotions; and my colleague Lynda James, who is the Head of Media and Communications.
(Mr Roberts) Rees Roberts; a farmer, and also Chairman of Welsh Lamb & Beef, and I am Chairman of the Welsh Council of the MLC, and a Commissioner of the MLC.
(Mr Bansback) I am Bob Bansback. I am the Corporate Strategy Director of MLC.
Chairman: Thank you.
137. Good morning. You describe yourself as a producer co-operative, and, reading your notes, you have some 7,500 livestock farmers in that co-operative. Could you explain how you operate and what processing and freezing capacity you have?
(Mr Roberts) My colleague, Mr Thomas, will answer that question.
(Mr Thomas) Welsh Lamb & Beef Promotions is an agricultural co-operative, it is registered under the Industrial and Providence Societies Act, and currently has about 7,000 farmer members. Each farmer member pays an annual subscription, which currently stands at £60; of the first £60 they pay, 25 pence is allocated to a nominal shareholding. If the subscription lapses, for whatever reason, the shareholding is forfeited, so thereby we keep the active participation, that is, only farmers who are actually actively subscribing are, in fact, shareholders, so the control of the body is always in the hands of the active participants. For their £60 shareholding, they are entitled to participate in the Farm Assured Welsh Livestock Scheme, which Welsh Lamb & Beef has developed and operates in Wales; and the purpose of that is to provide consumers with an assurance as to how the animals are reared, on farm, and the welfare considerations, traceability, things of that sort. Regarding the freezing and the processing side, Welsh Lamb & Beef Promotions, essentially, is a promotion and marketing business, and, as such, tends to broker deals for the brands Welsh Lamb and Welsh Beef, it tries to find promotional routes to market-place for them, either at home or overseas. It works very closely with the processing sector, and, in fact, we have established a Guild of Processors that are approved actually to process the brands, this is the Welsh Lamb and Welsh Beef. With regard to freezing operations, the availability of freezing facilities in Wales is somewhat limited, and it is mostly in the hands of the processors, and they use it for taking surplus stock off the market and bringing it back later; there is very little industrial freezing taking place on that side.
138. On the management side of it, why did the WLBP become an independently-managed business, and did you receive assistance from the Government or any other associated body?
(Mr Thomas) The independence is a relative term, of course, because, when the body was established as a farmer co-operative, some 15 years ago, it always has been independent, it is a public co-operative. Up until three years ago, various arrangements were in force, whereby the effective management of the body dealt with a company that was set up in Wales, called Welsh Food Promotions, which was dealing with the whole remit of food promotional issues. Three years ago, that company was subsumed, effectively, into the WDA, and a Food Directorate was created in that operation. At that time, Welsh Lamb & Beef Promotions felt, and put a case, that, since it was farmer-owned and farmer-controlled, it should be, effectively, independent of a Government agency, and a case was put to have it managed effectively independently as well; so that is the reason for the perceived independence that took place three years ago. Support has been given from the WDA Food Directorate to provide a grant, by way of a facility grant, to assist in the running of the business, and the income of Welsh Lamb & Beef Promotions comes from three main sources; the first and foremost being the farmer voluntary subscription. We then get, due to a relationship with the Meat and Livestock Commission, the equivalent Welsh share of the species promotion levies, collected by statutory instrument in the UK, the equivalent share for Wales is refunded, or returned, to Welsh Lamb & Beef Promotions. And the third source of income is from the WDA Food Directorate.
139. What percentage is that?
(Mr Thomas) The percentages of incomes are, approximately, I would imagine, about 20 per cent comes from the farmer subscriptions, probably about 45 per cent from the species promotional levy, about 20 per cent from the WDA Food Directorate, and we are currently in receipt of an Objective 5b Programme, which was the old Objective 5b Programme for Rural Wales, and that accounts for the balance in this current year. Next year, the percentages will change, because, obviously, the Objective 5b Programme terminates at the end of this calendar year. So it is approximately 20, 45, 20 and whatever else we can find, really.