Memorandum submitted by the National Farmers'
Union (NFU) (X17)
1. The National Farmers' Union of England
and Wales welcomes the opportunity to provide input into the EFRA
sub-committee inquiry into the poultry industry in the UK. The
NFU represents the interests of the full range of poultry producers
in England and Wales from small free range and organic egg and
poultry meat producers to the very largest intensive and extensive
producers, packers and processors in the poultry industry.
2. Our response covers issues affecting
the egg sector, the poultry meat sector, and finally issues affecting
both sectors.
EGG SECTOR
3. The Welfare of Laying Hens Directive,
implemented in the England and Wales as the Welfare of Farmed
Animals (England) (Amendment) Regulations 2002 has already and
will continue to have, a very significant impact on egg producers
in this country. An NFU survey1 conducted after the announcement
of the ban on traditional cages found that over 60% of farmers
did not think that they would continue in egg production after
2012. The most frequent reason provided for this decision was
the high cost of moving from traditional cages to alternative
systems. The cost of implementing the Directive in this county
alone is estimated by DEFRA to be £466 million2. The effect
of the increase in the costs of production in the UK, brought
about by this legislation, is that the industry is at great risk
losing its customers to eggs imported from countries with lower
welfare standards and lower costs of production. At particular
risk is the egg processing sector—a sector which is expected
to grow from 25% to 40% of our egg production. Egg powders, (eggs
with the water content removed), are relatively cheap to import.
4. It is expected that tariff rates will
fall in the next WTO round. In the absence of any protection for
the UK's higher costs of production, brought about by our superior
welfare standards, our domestic egg industry will be severely
threatened.
5. Recent changes to the Egg Marketing Regulations
will require eggs to be marked from 1 January 2004, with method
of production, holding of origin and country of origin. For most
small to medium sized packer/producers, this will entail the purchase
of costly inkjet printing equipment. The NFU has calculated that
the cost of this requirement to the UK industry could be in the
order of £8 million3. This assumes that there will be flexibility
given to member states as to where eggs can be marked. If, however,
the July 2003 review of the Directive concludes that eggs must
be marked at the farm of production rather than at packing station,
many more producers will require this equipment, increasing the
cost to the industry to £130 million4. The burden of this
requirement will fall heavily on smaller egg producers, who, in
addition to the high capital cost of purchasing the equipment,
will face disproportionately high running and servicing costs.
6. Beak trimming, the removal of the tip
of a young bird's beak to prevent feather pecking and cannibalism,
will be banned in this country from January 2011. Producers would
like to stop beak trimming birds, but unless a non-aggressive
laying hen can be bred by 2011, it will still be necessary to
trim the beaks of young birds. This is a particular problem for
free range laying flocks due to the larger colony size compared
to caged layers.
POULTRYMEAT SECTOR
7. The poultrymeat sector in the UK is rightfully
proud of its high standards of bird health and welfare, coupled
with its adherence to strict environmental standards. However,
in recent years the sector has been under considerable pressure
from imports from countries with lower costs of production and
lower welfare standards. Many smaller independent chicken meat
and turkey producers have been forced out of business as a result
of this downward price pressure. Larger integrated companies have
also not been immune from this effect and a number of them have
also closed sites or "down-sized" their operations.
For example, turkey poult placings in the UK fell by 32% between
1998-025.
8. The main competitors in the global poultrymeat
market include Brazil and Thailand which also benefit from lower
wage rates. It is calculated that the cost of chicken production
in Brazil is 40% lower than the UK, and processing costs are 43%
lower6. This, coupled with the relative strength of sterling has
made the UK an attractive import destination. The second-largest
turkey producer in the country has recently gone into receivership
as a result of this considerable import pressure. In 2002, turkey
imports amounted to 60,000 tonnes7, increasing from 31,500 tonnes
in 2001. Whilst this inquiry is not focusing on the processing
sector, the knock-on effects to producers supplying processors
such as these are significant.
9. Again, as for the egg sector, it will
be necessary to secure some form of protection in the WTO negotiations
to protect the poultrymeat industry from further contraction.
10. Chicken meat production in this country
is covered by the Assured Chicken Production scheme which requires
high standards of bird welfare and animal husbandry. However,
it has recently been demonstrated that chicken meat production
in some third counties does not equal these standards. In these
cases, poultrymeat imported from third countries has been shown
to contain traces of banned products such as nitrofurans. Strict
surveillance must be maintained to ensure that products containing
nitrofurans, or other substances dangerous to consumers, do not
enter the foodchain.
ISSUES OF
CONCERN COMMON
TO BOTH
EGG AND
POULTRYMEAT SECTORS
11. The Pollution Prevention and Control
Regulations came into effect in 2000 and enact the EU Integrated
Pollution Prevention and Control Directive. They aim to prevent
and control emissions to air, land and water, and to address energy
efficiency, the consumption of raw materials, noise and site restoration.
Poultry installations with more than 40,000 poultry places are
currently subject to the scope of the legislation, or will be
in 2007. Current fixed fees for units which can comply with standard
farming installation rules are £2,950 for a permit application
and £1,975 for the annual small farming annual subsistence
fee. It is proposed that these charges will increase to £3,024
and £2,024 respectively for the period 2003-04, although
there has been no reason provided for these increases8. This is
a large cost for a small poultry enterprise to bear. It is been
noted with concern that poultry producers in some EU countries
are not charged for IPPC inspections. In Northern Ireland the
IPPC charge for the poultry industry is less than that proposed
for England and Wales. The NFU does not believe that the pig and
poultry industries should be responsible for helping the Environment
Agency's regulatory IPPC infrastructure.
12. In addition, there has been speculation
that the threshold for the introduction of legislation will reduce
to 20,000 poultry places.
13. Planning permission is an area which
has a significant effect on the poultry industry. There have been
several cases where producers have had difficulty in obtaining
planning permission to set up new units or extend existing facilities.
In some cases, the need for additional buildings is the result
of producers providing more space for the same number of birds
due to the requirements of animal welfare legislation. More favourable
treatment from planning authorities for producers wishing to convert
redundant poultry buildings to other uses when the useful life
of a building for housing poultry has ceased would also be welcomed.
Furthermore, it has been suggested that the removal of agricultural
ties from farm dwellings would help provide additional income
when farmers retire or farming operations cease on that unit.
14. Whilst the disease status of the UK
poultry industry is very high, producers must be able to use the
full range of veterinary products in the event of a disease outbreak.
There have been a number of cases recently where veterinary medicines
have been withdrawn from use as they have fallen foul of EU licensing
procedures. One such product that falls into this category is
Emtryl which is used for the control of blackhead in turkeys.
The withdrawal of this product leaves the turkey industry in a
very difficult position should an outbreak of blackhead occur.
15. The recently enacted Animal By Products
Regulations mean that birds dying on farm must be sent for incineration
or rendering. The removal of the option to bury fallen stock on
farms has added to the cost of poultry producers. For example,
low capacity incineration on farm costs around £24 per tonne
in running costs alone9—to this must be added the capital
cost of purchasing the incinerator and the cost of an operative
to feed birds into the incinerator at an almost constant rate.
If producers were allowed to compost fallen stock to convert daily
mortality losses into an environmentally and biologically safe
storable product, as practised for example in the USA, costs to
producers would reduce considerably.
16. Another piece of environmental legislation
which has added to the travails of UK poultry producers is the
Climate Change Levy. The majority of poultry producers have achieved
the energy reduction target for the first milestone review of
the scheme. However, the DEFRA decision to permit the trading
of carbon was a major departure from the initial aims and intentions
of the discount scheme, and made it more difficult for sectors
as a whole to meet their targets. The NFU will do all it can to
help poultry producers become more energy efficient and achieve
the valuable discount for the efforts.
17. The imposition of Nitrate Vulnerable
Zones in 2002 to 55% of England will also have an impact on poultry
producers. For a 100,000 bird layer unit producing 4,100 tonnes
of manure a year, 314ha of arable land will be required to spread
it at the maximum application rate of 210Kg N/ha per annum10.
Many producers will not own sufficient land themselves for spreading
at this rate and will therefore face increased contractor costs
for transporting this material to neighbouring farms. The Waste
Licensing regulations may also impose rules on the storage and
transport of "exported" litter and manure.
18. Other costs incurred by domestic egg
and poultrymeat producers which are not faced by competitors in
third countries include: the ban on the use of mammalian meat
and bone meal in poultry feed and the reduction in the value of
end of lay hens and broiler breeders due to the increased processing
costs associated with mandatory health and hygiene requirements
in processing plants. The meat and bone meal ban has also led
to higher offal disposal costs.
19. We would welcome the opportunity to
explain, in more detail, the background behind many of the above
issues.
REFERENCES
(1) The Future of UK Egg Production—NFU-December
1999
(2) DEFRA Partial Regulatory Impact Assessment
May 2001
(3) NFU Letter to Commissioner Franz Fischler
November 2000
(4) NFU Letter to Commissioner Franz Fischler
November 2000
(5) DEFRA Poultry and Poultrymeat Statistical
Notices
(6) Peter Van Horne, LEI, The Hague, July
2002
(7) DEFRA Poultry and Poultrymeat Statistical
Notices
(8) Environment Agency Consultation Document
2002
(9) Practical Disposal Options for waste
from Egg Production Units—NFU-2003
(10) Practical Disposal Options for waste
from Egg Production Units—NFU-2003
National Farmers' Union
April 2003
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