Memorandum submitted by Ms Louise Manning
(X02)
I am both a broiler poultry farmer from Herefordshire
(with my husband), and a management consultant specializing in
integrated management systems within food production and more
specifically primary production. I am also undertaking a part-time
PhD (which I am self-financing) at the Royal Agricultural College,
Cirencester with the following title:
DEVELOPMENT OF
A QUALITY
ASSURANCE MODEL
FOR BROILER
PRODUCTION WITH
EMPHASIS ON
THE CHANGING
REGULATORY ENVIRONMENT
AND INCREASING
GLOBAL TRADE
I have just finished my first year out of the
five years study and some of my conclusions to date, which I feel
are pertinent to the poultry industry inquiry are detailed later.
The first question I feel needs to be addressed is:
How will the success of the broiler supply chain
be measured?
Will it be one or a combination of the following?
— Improved animal welfare.
— Improved efficiency and profitability
at the producer level and/or cheaper meat on the retail shelf.
— Increase in consumption of poultry
meat and/or improved consumer nutrition and health.
— Ever increasing diversity of the
poultry meat products and the poultry ready-meals market giving
the consumer ever increasing choice.
— A reduction in food safety incidents
attributed to poultry food products or even "pathogen free"
meat.
— Improved management of the environmental
impact of broiler production.
— A maximisation of profit margins
by meeting customer defined targets more consistently and minimising
waste.
— Producers staying in business.
I feel that this is the key question to answer
and not all the above are realistically deliverable, but without
defining the future needs and aspirations of those in the supply
chain and the final consumer, future strategic development and
the sustainability of the UK industry cannot be effectively planned
and implemented. Poultry meat is ultimately a recognized healthy
source of protein, is very versatile and has many cooking options
and is quick and easy to turn into a nutritious meal.
Point One: There needs to be cross-compliance
within national and international policy and legislation to minimise
the potential conflict between free trade, food safety, animal
welfare, environmental, social accountability and personnel health
and safety.
Point Two: There are a number of industry
drivers which currently require higher standards in Europe compared
to other countries for example, stocking density. This is not
reflected in "value being added" to the end product
rather it adds to the cost of production and makes the industry
uncompetitive on a global scale. Animal welfare is not explicitly
mentioned in the GATT Agreement 1994 or in other WTO Agreements,
and there has not yet been a ruling under the dispute settlement
procedure, which would define the position c.f. WTO. The 70th
General Session of the OIE or World Animal Health Organisation
adopted a recommendation committing the OIE to take the lead on
animal welfare. The WTO Agreement on the Application of Sanitary
and Phytosanitary Measures (SPS Agreement), which came into force
in January 1995 with the WTO, was aimed at minimising the negative
effects of unjustified health barriers on international trade.
The EU is also looking at developing bilateral
agreements with regard to animal welfare and the differentiation
on welfare issues and environmental protection needs to be reconciled
otherwise Europe will become increasingly uncompetitive.
". . . it is necessary to protect the environment,
to ensure food safety and to give consumers confidence that there
are minimum standards . . . but the government has to make sure
that high standards do not simply drive domestic products out
of business as increasing trade liberalization opens markets to
goods produced to lower specifications. It must work in the forthcoming
trade round to make sure environmental and welfare standards are
not undermined in a "race to the bottom" (Source: Curry
Report).
Point Three: The introduction of environmental
legislation such as the Animal By-Products Regulation, Nitrate
Vulnerable Zones, and Integrated Pollution Prevention and Control
(IPPC) will add to the cost of production through the increased
cost of waste management and also the business resource required
to assimilate, develop and maintain the relevant information and
documentation required to achieve an IPPC permit. The cost of
the permits and annual monitoring will also add directly to the
cost of production.
"Regulation is a key tool in setting baseline
standards for the industry. As we have seen, there are already
in place significant EU Directives on water, waste, nitrates and
Integrated Pollution Control which will require significant changes
to farming practice over the next five to 10 years. The Directives
. . . will by themselves mean substantial costs for some farms."
(Source: Curry Report)
Point Four: Bio terrorism policies, that
address poultry, need to be in place at national and international
levels, and continually reviewed, because a major disease outbreak
(notifiable disease such as Avian Influenza or Newcastle Disease)
would have devastating welfare, environmental and economic consequences.
This has been shown dramatically in the Avian Influenza outbreak
in Holland and the Newcastle Disease outbreak in the US.
Point Five: An integrated broiler production
company plays a significant role in the local rural economy. The
impact to a community if production were to move overseas (if
the UK proves uncompetitive viz a viz the cost of production)
is not only the loss of jobs in the factories, feed mills, hatcheries,
transport companies, contractors and servicing companies, but
also for the private broiler producers that supply the factories.
There are a number of allied SMEs that provide services to the
private growers including veterinary practices, waste disposal,
machinery manufacturers, electricians, servicing contractors,
cleaning teams, and pest control contractors. Some of the inputs
to the broiler sites are also supplied by local farmers via the
feed mills including wheat, cereals and pulses and the effect
on a local farming community if a feed mill were to close would
be dramatic. The poultry litter from the site provides a valuable
resource as an organic nutrient to local farms. The UK government
has identified four objectives for sustainable development:
— Social progress, which recognises
the needs of everyone.
— Effective protection of the environment.
— Prudent use of natural resources.
— Maintenance of high and stable levels
of economic growth and employment,
It is critical to identify both the direct and
indirect employment and economic growth sustained by the poultry
production industry.
Point Six: The changes under Mid-Term CAP
review will affect poultry production even though it is an unsubsidised
industry as one of the major inputs is feed the cost of which
will be influenced by CAP reform. With the Mid-term CAP review
registered holdings will be entitled to grant aid if they are
within a quality assurance scheme. However will this only apply
to previously subsidised enterprises within the British Farm Standards
portfolio or will currently unsubsidised sectors be eligible eg
Assured Chicken Production and if so will there be a differentiation
between registered holding installations and non-registered holdings
on eligibility for aid and/or therefore between Assurance Standards
in the British Farm Standards portfolio.
Point Seven: Defra needs to set up a formal
policy to ensure that there is an independent accreditation protocol
for all Farm Advisory Services and Consultancy under the CAP Reform
quality measures (Regulation EC No 1257/1999).
Point Eight: It is critical due to the ongoing
restrictions of the EU Nitrates Directive that the government
recognises and develops policy and invests in research, to utilise
poultry litter (and other forms of manure) as either an energy
source or as a component in the composting process. (This also
links in with the Animal Byproducts Order). The utilization of
poultry litter on site as an energy source (c.f. biogas units
on farms in the EU) will not only reduce the cost of production;
aid the government meet its "alternative" energy objectives;
assist businesses achieve their climate change obligations but
also provide an alternative source of income to the site if excess
energy can be sold to the National Grid.
It would also assist in the reduction of ammonia
emissions, because air scrubbers could be introduced into the
system, which would convert the ammonia into a liquid fertilizer.
The costs of a bioenergy plant are significant
and outside the reach of most private growers especially as profit
margins are currently under stress, but research into the technology
or the development of "green" grants or "green"
loans would potentially help businesses to achieve this worthwhile
solution.
Point Nine: Further research needs to determine
how biodiversity can be enhanced on a holding which has a poultry
enterprise whilst maintaining the level of biosecurity required
to maintain bird health and welfare. With the Mid Term Review
of CAP there will be significant emphasis on environmental enhancement
and whole farm environmental planning. By encouraging bird species
to the area adjacent to a broiler site, there is an increased
risk of disease being introduced by wild or migratory birds. This
will be further heightened if there is a greater move to free
range birds as the degree of biosecurity achievable will be reduced.
Biosecurity procedures are central to minimising
the risk of bird disease and are a necessary part of the poultry
installation's environmental protocol. Biosecurity is a key factor
because, the greater the level of disease on a broiler site, the
greater the use of medicinal products with the associated potential
food safety issues (although there are control measures in place)
and the greater the impact on the environment of disposing of
carcases.
"The use of antibiotics both as growth promoters
and prophylactic treatments has been a key driver in allowing
the intensification of livestock production systems, particularly
pigs and poultry. . . . Chicken a luxury in the 1950s is now often
the cheapest meat available." (Source: Curry Report)
Point 10: Due to recent problems with antibiotic
residues in imported chicken, nitrofurans present in imported
poultry meat (ref. Food Standards Agency Report), the "assurance"
of food safety and quality on a global scale has been called into
question. The recent publicity on misleading labeling of imported
chicken for the catering trade and traces of DNA from pigs has
impacted on consumer confidence.
Point 11: In order to measure the success
of any legislation or policy, and/or industry scheme or quality
assurance scheme there must be a formal set of performance indicators
which are universally understood; can be objectively measured
and easily demonstrate that the legislation, policy or scheme
has met the required objectives; and provide positives positive
outcomes.
The development of performance indicators could
be internally driven as an outcome of developing a business policy
with associated objectives and targets (c.f the protocol of ISO
series); be commercially driven as an outcome of continually seeking
to reduce costs and improve profitability or as a result of the
need for regulatory compliance. The third party auditing process
whether by Quality Assurance Auditor; Government Body or retailer
representative must identify whether there is objective evidence
of compliance either by:
— Assessing the degree of formalisation
of management systems ie Are procedures documented and have they
been implemented. This involves the auditor identifying whether
specific documents are available on the day of the audit and if
records have been completed to demonstrate implementation of the
systems and thus compliance with the specified Standard and/or;
— Observing practices and questioning
ie identifying if key tasks comply with both the QA Standard and
legislative requirements and with internal company procedures
and/or;
— Measurements—monitoring and
measurement of key performance indicators which can benchmark
individual business' performance in line with agreed Best Available
Techniques for performance and/or benchmark one business with
a group of similar businesses to identify current performance
and opportunities for continuous improvement.
There are major constraints on the broiler industry
and as price takers rather than price fixers, the only viable
future is for the industry is either to reduce the cost of regulatory
compliance and/or seek ways to try to absorb the added cost of
regulatory compliance by addressing business performance especially
environmental costs, waste minimisation and performance against
key indicators and/or seeking to add value further down the supply
chain.
Innovation in the areas of biofuel and renewable
energy may not only reduce the costs of production but also be
a means to provide increased income. The development of technologies
to address energy generation requires both government policy and
financial commitment.
In order for individual businesses and the whole
supply chain to be sustainable into the future the industry needs
to work with government at local, European and global levels to
meet the UK Government key principles for sustainable development:
— Produce safe, nutritious, healthy
products, in response to market demands and in compliance with
a transparent QA standard;
— Support the viability and diversity
of rural and urban economies and communities—the broiler
industry not only contributes to local economy by direct employment,
but also all the allied businesses including private broiler producers;
farmers who supply feed ingredients; contractors such as cleaning
contractors, electricians, plumbers, equipment suppliers;
— Enable viable livelihoods to be made
from sustainable land management both through the market and through
payments for public benefits especially through the reform of
the CAP;
— Respect and operate within the biological
limits of natural resources (especially soil, water and biodiversity
and meet the regulatory requirements of IPPC;
— Achieve consistently high standards
of environmental performance by reducing energy consumption, by
minimising resource inputs, and use renewable energy wherever
possible;
— Ensure a safe and hygienic working
environment and social welfare and training for all employees
involved in the food chain (This creates a requirement for sufficient
profit margin at each step in the supply chain to compensate for
the added social costs) and;
— Achieve consistently high standards
of animal health and welfare.
Ms Louise Manning
8 April 2003
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