Memorandum submitted by the British Poultry
Council (X19)
INTRODUCTION
1. The British Poultry Council welcomes
the opportunity to make this submission to the Environment Food
and Rural Affairs Committee of the House of Commons.
2. The BPC represents the interests of companies
in the UK poultry meat industry involved in all aspects of production,
covering primary breeding, hatching, rearing, slaughter, primary
and further processing. BPC members account for 90% of poultry
meat produced in the UK and for the largest proportion of UK free
range and organic poultry production. BPC does not represent table
egg producers.
3. The UK poultry meat sector employs approximately
45,000 people directly and over 90,000 indirectly in the provision
of goods and services to the sector. The industry is the largest
single user of UK cereal production consuming about a fifth of
the wheat harvest and is a major employer in rural areas.
POULTRY MEAT
PRODUCTION AND
CONSUMPTION
4. Poultry meat accounts for nearly half
the volume of all UK meat production. Production has increased
by 80% since 1985 to 1.5 million tonnes (carcase weight equivalent)
(See Annex 1). The UK is the second largest poultry meat producer
in the EU (See Annex 2) but world poultry production is dominated
by the USA, China and Brazil. (See Annex 3).
5. UK consumption of poultry meat has increased
by 91% since 1985 to 1.7 million tonnes. Per capita consumption
in the UK is higher, and has been increasing more rapidly, than
in the whole EU over the last decade. Poultry meat accounts for
43% of meat consumption in the UK (See Annex 4).
POULTRY MEAT
SECTOR STRUCTURE
6. The poultry meat sector is highly vertically
integrated with individual companies controlling all stages of
the farming and processing operations. Production and processing
is also highly concentrated into a few large integrated companies.
Five companies control 80% of UK chicken production. Between 50-60%
of chickens are grown on integrator-owned farms with the rest
grown by independent farmers under contract to one or more integrated
companies. Some 90% of UK chicken and turkeys are produced under
the independently audited Assured Chicken Production (ACP) scheme
and the Quality British Turkey (QBT) scheme, respectively.
BIRDS REARED
AND PRODUCER
PRICES
7. Last year, 2002, the number of chicks
placed for meat production in the UK was 980 million, about the
same as the number five years earlier. However, UK turkey poult
placings over the same period fell by 35% from 55 million to 35
million.
8. DEFRA figures for producer prices show
the average price received by producers for table chickens fell
again in 2002, to 67.7 pence/kg (carcase weight). This is a 21%
drop on the price five years earlier and 25% below the average
price of the previous 10 years (1992-2002).
9. Producer prices for turkeys in 2002 were
114.2 pence/kg (carcase weight), some 12% lower than the average
1997 price and 9% down on the average price for the period 1992-2001.
10. The average producer price for spent
layer and breeder hens in 2002 was 10 pence/kg (carcase weight)
compared with 36.2 pence/kg in 1997 and 60% below the average
producer price of the 10 years to 2001.
FARMING SYSTEMS
11. Approximately 96% of chickens and 90%
of turkeys are reared in conventional indoor systems in the UK.
Meat birds are reared in large environmentally-controlled houses
on a floor covered in a litter of chopped new straw or clean wood
shavings. Conventional houses have temperature-controlled fresh
air ventilation.
12. There are no livestock auction markets
for poultry. Day old chicks are delivered directly from the hatcheries
to the rearing farm and at the end of the rearing period all birds
are taken directly from the farm to the processing plant. Thus,
in the UK there is minimal transport of live poultry for slaughter
and this is usually over relatively short distances and journey
times. By law each flock is preceded by a Production Report providing
the full health status of the flock to the Official Veterinary
Surgeon in the processing plant.
13. This integrated structure enables a
high degree of control and traceability from farm to store. The
needs and wishes of consumers and retailers are more readily translated
by the processors into standards and procedures on farms. This
facilitates more rapid take-up of new scientific information and
interventions across poultry farms.
POULTRY BREEDING
14. Modern poultry meat breeds are the result
of cross-breeding between different male and female lines, which
have been selected for several desirable traits. Cross-breeding
results in hybrid vigour giving added vitality and productivity
to the offspring.
15. Computerised data management now enables
a large number of traits to be selected. Meat chickens are selected
for multiple traits to produce a balanced, dual-purpose bird suitable
for breeding from and for meat production. Traits include sound
skeletal development, physiological robustness, and resistance
to diseases, as well as fertility and egg production (necessary
as breeding birds), and muscle growth and feed conversion (necessary
for meat birds).
16. Selective breeding, greater understanding
of nutritional needs, modern environmentally-controlled housing,
strict farm hygiene, vaccine development, and stockman training
have all combined to enable modern meat chickens to be grown to
market weight of 2.2 kgs in around 40 days, half the time they
took 40 years ago. Over the same period the number of fertilised
eggs being laid by the same breed has increased by approximately
one extra egg year on year. This demonstrates the balanced breeding
programme which has not over-emphasised particular traits at the
expense of others. The "liveability" of meat chickens
has also improved over the last decade or more, particularly the
robustness of chicks in the first week of life, and overall mortalities
in flocks are at historically low levels.
17. Selective breeding of meat chickens
has been criticised by some who allege that it has led to leg
health problems in the meat chicken. Kestin, et al, of
Bristol University, published a paper in 1992 detailing a method
of scoring the gait of chickens and this system has been used
in more recent studies. CIWF and other welfare groups cite two
gait studies carried out in Denmark and in Sweden as evidence
that the so-called fast growing strains of meat chicken are genetically
incapable of being reared without high levels of leg weakness
(scores 3, 4 and 5).
18. However, to date the only gait scoring
study of the UK national chicken flock is a major survey undertaken
by the industry, under the auspices of FAWC and analysed by Pfeiffer
and Dall'Aqua, of The Royal Veterinary College. This examined
over 37,000 chickens on 79 farms from 1994 to 2000. It confirmed
that the prevalence of leg weakness in the UK flock is below 3%
which is substantially lower than reported in other investigations.
It also indicated that leg weakness prevalence decreased significantly
(by 20%) between each successive period of the study.
19. The fact that the vast majority of chickens
are reared every year in the UK without leg weakness indicates
that where variations in scores between farms and between periods
did occur in the study these were due to environmental or nutritional
factors, not genetic factors.
20. The health and welfare of farmed chickens
and other poultry are well protected in EU directives and several
UK regulations and codes of practice. While the regulations are
multi-species, many of the requirements apply specifically to
poultry species. The Commission is currently drafting a directive
covering solely chickens reared for meat which should be published
later this year. The BPC welcomes this work which will bring together
and add to existing rules and regulations and apply them equally
across all EU Member States.
21. Any new EU welfare rules governing the
UK and EU poultry meat sector must take existing international
trade rules into account. The EU cannot rely on changing WTO rules
to require the same standards of countries exporting to the EU
or on banning ban imports systems not conforming to new UK or
EU welfare conditions. It is important that the new chicken welfare
directive does not further constrain the competitiveness of the
EU poultry producers. Imposing even more constraints on our producers
while opening the door wider to non-complying imports in the name
of trade liberalisation would be political hypocrisy
SAFE FOOD
22. Genetic, nutritional and management
improvements in poultry have benefited consumers and public health
overall, by providing consistently safe, lean, and affordable
meat protein. The Food Standards Agency survey of chicken on retail
sale in the UK published in 2001 confirmed that Salmonella presence
on fresh British-origin chicken meat, at 3.9%, is the lowest level
since records began. The level for all chicken, including imported
and frozen, was a low 5.7%.
23. Campylobacter contamination remains
high but appears to have been reducing. The poultry sector is
working closely with the FSA and researchers to improve the scientific
understanding of Campylobacter in food animals—particular
chicken. This is necessary to be able to prevent Campylobacter
infection getting into poultry flocks with the same success achieved
against Salmonella. Rearing birds indoors under strict bio-security
helps to prevent the introduction of diseases into the flock,
including food poisoning bacteria such as Campylobacter, and serious
avian diseases such as Avian Influenza and Newcastle Disease.
ENVIRONMENTAL BENEFITS
24. Modern poultry breeds are also benefiting
the general environment by halving the amount of feed and water
needed per bird up to slaughter age, as well as the amount of
manure produced that has to be disposed of into the environment.
Total nitrogen and phosphorous emissions per bird are around 40%
and 30% lower, respectively, for modern chicken breeds than for
slow growing breeds under alternative systems.
25. Around half of the litter from UK poultry
houses is used as a renewable fuel to generate green electricity.
26. BPC negotiated a Climate Change Levy
Rebate Agreement with the Secretary of State in 2000. At the first
two-year milestone of the ten year agreement, all but two of the
1,179 poultry farms in the DEFRA/BPC Agreement met their energy
saving target. All but five were re-registered for the second
mile-stone. An overall carbon saving of 67,270 tonnes was recorded
by these poultry farms. This is an encouraging performance reflecting
the responsible approach to energy reduction across the sector.
27. However, the long-term target is high
at 13% and subsequent mile-stones will be increasingly challenging
for poultry farmers as the "easy" energy management
options have all been taken up. Later milestones are likely to
require substantial reconstruction of some existing houses in
order to meet the target which would make it uneconomic for those
farms to continue in the rebate agreement.
THE BURDEN
OF IPPC
28. Poultry farming and processing is covered
by the EU Integrated Pollution Prevention and Control Directive
(IPPC) which, inter alia, places stringent emission controls and
other environmental requirements on poultry production. In primary
agriculture, IPPC also covers intensive pig farming but no other
livestock or arable sectors.
29. Green house gas emissions from poultry
farming are lower than from any other significant livestock farming
sector, yet pig and poultry farmers are required by the Directive
to obtain a permit from the Environment Agency to operate. All
new or substantially changed farms with more than 40,000 places
must have a Pollution Prevention and Control (PPC) permit before
starting up, and all existing poultry farms will have to be permitted
by the end of 2006.
30. The British poultry meat sector is very
concerned about the fees, administration and compliance costs
of the IPPC Directive. Real changes are needed in the permitting
procedure and the amount of information required. Despite very
close collaboration between the Environment Agency and the poultry
sector, obtaining just four new farm permits to date has been
a major administrative burden on the company concerned.
31. Each application has taken on average
the equivalent of one person four months full time work, estimated
at approximately £11,500. In addition, for each site there
have been costs of £10,000 for testing and surveys required
by the Environment Agency. A site nitrate levels survey alone
costs £5,000. On top of these costs there is an application
fee of £3,024 and an annual subsistence fee of £2,537,
provided the farm is complying with Standard Farming Rules. Total
costs so far per PPC application are estimated at a staggering
£27,000.
32. The Standard farming Rules are supposed
to simplify the permitting procedures and reduce costs but compliance
costs could be significant for some farms. Poultry farms which
are not able to comply with the Standard Farming Rules are treated
in the same way as an industrial complex and will pay higher permitting
charges.
33. The company that has made the four applications
to date is a large poultry integrator. This company's experience
confirms that it is very doubtful that smaller companies and independent
poultry farmers would be able to cope with the huge administration
and other costs, and the fees charged for PPC applications in
their present format.
34. All existing poultry farms over 40,000
bird places (we estimate around 1,200 farms) will have to be permitted
within the next three years. On the current experience this could
cost the UK poultry sector almost £33 million of which £7
million will be the first year charges to the Environment Agency.
These massive costs exclude costs of complying with the Standard
Farming Rules. Clearly a radical reduction in the amount of information
required in applications is urgently needed.
35. The PPC permit charge by the Environment
Agency is a UK-only charge which is not provided for in the EU
Directive and is not paid by poultry farmers (or other industries)
in other Member States. The EU IPPC discriminates against pig
and poultry farming in favour of unregulated and more polluting
livestock and other agricultural sectors. The UK Environment Agency
charges discriminate against UK pig and poultry farmers in the
implementation of EU legislation.
36. In 2001, the Prime Minister established
the principle that EU legislation would not be "gold plated"
when implemented into UK law. UK-only charges, such as these levied
by the Environment Agency, are more in the nature of "gold
digging" than "gold plating" but are directly against
the principle set by the Government. In the primary agriculture
sector the charges on pig and poultry producers are also against
the oft-quoted principle of "polluter pays". These charges
should be abolished.
IMPORT STANDARDS
ARE NOT
EQUIVALENT
37. UK imports from Third Countries have
been increasing rapidly and are displacing imports from other
EU Member States and UK live bird production. In 2002 UK imported
almost 440,000 tonnes of poultry meat, 65% up on total imports
five years ago in 1997. Over the same period, imports from Third
Countries have jumped threefold from 27,000 tonnes to 116,000
tonnes, mostly frozen chicken breastmeat from Brazil and Thailand.
(See Annex 5). We believe that much of the chicken imported from
The Netherlands (150,000 tonnes last year) also originates in
Brazil or Thailand. We estimate that around half of all chicken
breastmeat consumed in the UK is now imported.
38. The cost of production in these countries
is much lower than for their EU counterpart. According to EU Commission
data, it costs
1.35 to produce a kilo of poultry meat in the UK
compared to 72 cents in Brazil. The main reason for this is clear.
EU poultry farmers and processors operate within a strict legislative
framework which reflects certain values strongly held by our society.
Far more fundamental than simply ensuring safe food, these social
values embrace employment conditions, animal health and welfare,
and environmental controls. These regulations impose significant
costs onto EU producers, but the same regulatory requirements
and costs are not required of producers in Third Countries exporting
poultry meat to the EU.
39. It is very clear from the recently published
Commission's Communication on Animal Welfare Legislation on farmed
animals in Third Countries and the Implications for the EU (COM
(2002) 626 final) that, by and large, there is no legislation
on welfare of farmed animals in those countries exporting to the
EU. The two main countries exporting poultry meat to the EU, Brazil
and Thailand, are not in the list of 30 countries which responded
to the Commission's welfare questionnaire. Given this, it is impossible
to confirm that poultry in these two countries is reared, transported,
and slaughtered under welfare regulations and conditions equivalent
to those applied by law to EU poultry producers.
40. There is very disturbing evidence that
this lack of equivalent standards and regulatory control also
applies in the area of food safety. The EU Commission is unable
to trust the competent authorities in Thailand and Brazil to comply
with the EU residue testing regulations. The Commission is requiring
every consignment of poultry meat from Thailand and Brazil to
be tested for residues of illegal nitrofurans when it arrives
in the EU.
41. The EU's confidential Rapid Alert system
records that scores of samples of Brazilian chicken imports were
positive for residues of illegal nitrofurans or their metabolites
in the six months since testing EU began but none of the offending
Brazilian plants have been delisted by the Commission. An inspection
visit by the EU Food and Veterinary Office to Brazil last year
confirmed for the third such visit that neither residue testing
nor veterinary certification by the Brazilian competent authorities
could be relied upon.
42. Yet import volumes from these countries
escalate every year, undermining EU producers' returns, driving
EU poultry farmers out of production and making a mockery of the
social values EU law-makers insist our society holds dear. It
appears that the Commission and Member State Governments are trading
EU public safety for increased sales of EU industrial goods, armaments,
and financial services.
THE WTO CONTEXT
43. We welcome the EU's success in getting
non-trade issues, such as animal welfare recognised in non-trade
issues in the WTO Doha Ministerial Declaration. To have any meaning,
it will have to result in WTO rules requiring actions or impositions
on goods traded by those countries which do not meet the required
standards of welfare, rather than the internal EU-only "solutions"
being proposed in the Commission's communication on animal welfare.
44. The Commission is proposing labelling
to enable EU consumers to make an informed choice as regards food
products, whether produced domestically or imported. We agree
with this. However, where the EU bans or restricts certain livestock
farming systems but does not apply the same ban in respect of
the imported product, but instead insists on labelling, then the
EU consumer is denied choice for domestic production but given
choice for the imported product. If labelling and informed choice
makes certain rearing systems or practices ethically acceptable
in the case of imports, then the same should apply in the case
of domestic production without the need for banning them in the
EU.
45. The Commission is proposing "green
box" compensation payments to compensate EU producers required
to produce to higher welfare regulations. This would enable EU
producers to compete on the EU market with cheaper imports which
are not required to meet the EU standards. In our view this places
the cost on the wrong party. It should be the imports which carry
the cost of complying with EU requirements, not the EU taxpayer.
It would also seriously devalue the real cost of producing to
the EU legal requirements by forcing EU market prices down to
the price of the cheap below-standard imports. EU consumers would
not be required to pay the full cost of the EU production systems
required by EU law.
46. We are very concerned that these proposals
and the EU's wider approach to the WTO is encouraging Third Countries,
particularly developing countries, to produce and export to the
EU the same food which the EU's own laws have made more expensive
but still possible to produce itself. We question whether it is
a sustainable agriculture policy for developing countries to be
persuaded to divert scarce agricultural and water resources into
growing food crops and livestock to feed the EU rather than crops
and livestock appropriate to feed their own people.
47. Tariffs are the most appropriate means
of ensuring that the EU social values enshrined in EU legislation
are not undermined by cheap imports from Third Countries not meeting
the standards. In the case of the unsubsidised EU poultry meat
industry, tariffs are not a prop for industry inefficiencies,
but recognition of the significant extra costs of EU regulation
which is not able to be required of producers exporting to the
EU. Tariffs are a practical and legitimate mechanism which the
EU must continue to apply in the clear absence of equivalent legislative
protection for animal welfare in Third Countries exporting to
the EU.
Current EU Tariff Structure Distorts Trade
48. The EU tariff structure contains several
anomalies peculiar to poultry meat which have severely distorted
trade in poultry meat imports to the detriment of EU poultry producers.
For several years Third Country exporters of frozen chicken breast
meat to the EU have been able to avoid paying the full tariff
by lightly salting the meat. The salt was not sufficient to preserve
the meat, however, and after much pressure from EU producers the
Commission clarified the tariff classification and the full tariff
appropriate to frozen chicken breast meat is being levied.
49. Serious anomalies remain, however, in
the case of "seasoned" frozen turkey meat, basted whole
frozen turkeys, and cooked poultry meat. The Commission's clarification
ruling made last year referred only to chicken meat, but the principle
that the salt was insufficient to preserve the meat, applies equally
to turkey meat.
50. As a result of small additions of seasoning
or of basting the turkey meat is currently classified as "prepared
or preserved meat", whereas neither the small amount of seasoning
nor the basting has any preservative effect. However, the tariff
payable is only 8.5% ad valorem, around one ninth of the full
tariff on frozen turkey meat. "Seasoning" and basting
in this context are a subterfuge for avoiding paying the proper
tariff.
51. A further anomaly, which is increasingly
likely to be taken advantage off by poultry meat exporters to
the EU, is the exceptionally low tariffs charged on cooked poultry
meat compared with fresh or frozen poultry meat. This will encourage
the loss of further processing and the manufacture of added value
poultry products to Third Country manufacturers.
52. There is an urgent need for a review
and rebalancing of the EU tariff structure for poultry meat products
to remove the avenues for tariff evasion and trade distortions.
Big Problems with Enlargement
53. BPC is worried about the preparedness
of the 10 new Member States to be able to comply with the regulatory
requirements in poultry farming and processing.
54. We are aware that poultry feed in some
of these countries still contains meat and bone meal and feather
meal. However, we are even more disturbed by the Report of the
Food and Veterinary Office, just published, of a mission to the
Republic of Cyprus in September—October last year (DG Sanco/8690/2002
MR Final). The FVO mission was to assess compliance with Community
requirements for imports of poultry meat, live poultry and hatching
eggs.
55. The FVO Report speaks of severe shortcomings
and an absolute lack of veterinary supervision of hygiene operations.
None of the poultry establishments were considered in compliance
with the requirements of Community legislation, and "an imminent
risk for human health cannot be ruled out." Cyprus is in
the first group of six EU candidate countries due to join in 2004.
At that time all poultry plants (and red meat plants) should be
complying with EU legislation irrespective of whether they are
exporting to the rest of the EU or not. All products will be in
free circulation.
56. Measures must be taken to ensure all
the candidate countries are complying before entry and that poultry
from non-complying candidates is not permitted to be put into
free circulation. Nor should non complying sectors in candidate
countries be permitted to continue to supply their domestic market
for more than a very short transition period.
Double Standards in the EU
57. Within the EU there are also examples
of different rules which discriminate against UK poultry producers.
For example the forced feeding of poultry for foie gras is illegal
in this country but not in France. Duck meat from force-fed French
ducks is a by-product of a production system which is illegal
in the UK, but is able to be exported cheaply to the UK in competition
with UK duck meat. In a single market single market rules should
apply.
58. There are other examples of state aids
which are given or denied, not according to the deservedness of
the cause or in accordance with EU wide criteria, but on the basis
of the political policies of a particular Government. We would
like to have access to the state aids on the same basis as our
competitors in other Member States.
Supermarket Power
59. The Office of Fair Trading recently
consulted on the operation of the voluntary Code of Practice on
Supermarkets Dealings with Suppliers. BPC responded that its members
have not noticed any reduction in the demands made on them by
the various supermarkets over the past year; rather demands have
intensified over the period. From their own experiences, poultry
companies believe that the Code has had no ameliorating affect
whatsoever on the actions of the supermarkets in respect of their
dealings with companies who supply them. Members remain very concerned
at the practices of supermarkets and the worsening situation.
60. There is a strong reluctance for the
BPC to cite specific examples and the individual supermarkets
involved for very real fear of retaliatory action by the supermarkets
and loss of business. This unwillingness is itself an indication
of the lack of confidence which companies have in the ability
of this Code to protect them against the actions of the supermarkets
they supply.
61. This is a voluntary Code and it is hard
to see any change in the plight of our supplier members as long
as the Code and the supermarkets it is intended to discipline,
are beyond the regulatory reach of the OFT.
SUMMARY CONCERNS
— The number of chickens reared is
stagnating and the number of turkeys continues to fall substantially,
being displaced by imported poultry meat.
— Average producer prices are at historically
low levels reflecting the very difficult market conditions.
— New EU welfare rules on chickens
must take international trade rules into account and not further
constrain the competitiveness of EU producers.
— The administrative burden and costs
on poultry farmers of obtaining IPPC permits is totally unsustainable.
Application procedures and information requirements for IPPC permits
must be greatly simplified and the UK-only charges for permits
abolished.
— The rules on EU imports are far fewer
and far less costly than the rules governing poultry production
within the EU. Import tariffs are a legitimate and essential method
of protecting EU social values embodied in the rules on EU producers.
— EU food safety rules are being flouted
by some Third Country suppliers according to the Commission's
own evidence, but no effective action appears to be taken against
them.
— In the WTO negotiations, the EU proposals
for labelling and "green box" payments to compensate
for EU animal welfare rules are seriously flawed. It is wrong
to devalue EU products to sell to EU consumers in order to compete
against liberalised imports of un-regulated products. Import tariffs
would place the cost of more appropriately on the imports and
not on the EU taxpayer.
— The current EU tariff structure on
poultry meat and poultry meat products is anomalous and trade
distorting, giving loopholes to exporters to the EU to avoid paying
the correct tariffs. The EU tariff structure for poultry products,
particularly turkey meat, needs to be urgently reviewed and rebalanced.
— There is clear evidence that some
candidate countries for EU enlargement are not able to comply
with EU regulatory requirements. Compliance must be ensured prior
to their joining. Any transition measures must be short and well-defined.
— UK poultry producers are disadvantaged
by competition from imports from farmers in some other Member
States using production methods which are illegal in the UK. These
methods should banned under common EU rules or the products not
be allowed in free circulation outside the country of production.
— The Code of Practice on supermarkets'
dealings with their suppliers is ineffective. An approach with
stronger regulatory underpinnings is needed.
British Poultry Council
May 2003
Annex 5
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