Select Committee on European Scrutiny Fourteenth Report


11 Requirements for feed hygiene

(24454)

8554/03

COM(03) 180

Draft Regulation laying down requirements for feed hygiene

Legal baseArticles 37 and 152EC; co-decision; QMV
DepartmentFood Standards Agency
Basis of considerationSecond SEM of 11 March 2004
Previous Committee ReportHC 63-xxvii (2002-03), para 5 (25 June 2003) and HC 63-xxxvi (2002-03), para 6 (5 November 2003)
To be discussed in CouncilApril or May 2004
Committee's assessmentPolitically important
Committee's decisionCleared (but see para 11.9 below)

Background

11.1 The wide range of Community measures dealing with the composition and marketing of animal feeds[15] include Council Directive 95/69/EC,[16] which lays down the arrangements for approving establishments manufacturing, producing or putting into circulation various such products. According to the Commission, recent events such as the BSE crisis suggest that further steps are needed, and it therefore put forward in April 2003 this proposal to extend the scope of, and update, the measures currently contained in Directive 95/69/EC.

11.2 The main changes proposed were set out in our Report of 25 June 2003, and would include the approval and registration of establishments (extending the need for registration to all food businesses); making operators of feed businesses responsible for ensuring feed safety; requiring all feed business operators (excluding those involved only in primary production) to put in place and operate an HACCP System;[17] requiring operators to have financial guarantees to cover the risks to their businesses; and allowing feed business operators to import feed and feed products only from third countries which appear on a list, drawn up in accordance with proposals which the Commission has put forward for a separate Regulation.[18]

11.3 Whilst the Government had welcomed the proposal, it had said that the practicality and proportionality of a number of the provisions needed to be examined, notably the proposed registration requirements for farms and the introduction of HACCP requirements. It was also thought unlikely that all feed businesses, including farms, could fulfil a new requirement to have financial guarantees in place, particularly as the cost of premiums could be unsustainable. However, although the Government had provided an initial Regulatory Impact Assessment, this had indicated that it was not possible at that stage to assess the financial benefits of the proposal, and that further information would be sought.

11.4 We subsequently received a supplementary Explanatory Memorandum of 30 October 2003 from the Parliamentary Under-Secretary of State for Health (Miss Melanie Johnson), together with an updated Regulatory Impact Assessment, which she said largely confirmed the issues identified previously, including the likelihood that the insurance industry would be unwilling to provide the cover needed for financial guarantees, and the need therefore to consider (at least in the short term) some kind of collective pool into which operators would provide funds for any incidents which might occur.

11.5 The Assessment also provided discounted costs and benefits for various options,[19] and we noted in our Report of 5 November 2003 that the benefits of the different approaches were similar (ranging from £4.5 million to 6.5 million), and would be broadly comparable to the costs (of between £9.9 and 11 million), but for the requirement for financial guarantees. Equally, whichever approach was adopted on the latter, the costs would rise significantly to at least £54 million (and, in certain circumstances could be as high as £83 million). In other words, how the issue of financial compensation is dealt with had a crucial bearing on the impact of the proposal. In view of this, we said that we would hold the document under scrutiny, and we asked the Minister to keep us informed in good time of any significant developments, particularly in relation to this point.

Second supplementary Explanatory Memorandum

11.6 We have now received a second supplementary Explanatory Memorandum of 11 March, in which the Minister says that the proposal has been discussed in recent Council working group meetings and by the relevant committee of the European Parliament. There is now general agreement in the working group that certain aspects of the proposal should be amended, and the Minister says that these would address the UK's concerns as follows:

  • financial guarantees would no longer be compulsory, though Member States would be required to encourage their uptake: at the same time, the Commission would be required to present a report, within two years of the adoption of the Regulation, on the feasibility and appropriateness of a system of financial guarantees for feed businesses;
  • although Community guidelines on the application of HACCP principles would be drawn up, Member States would be able to draw up national guides as well: it has also been made clear that the requirement for feed businesses to implement these principles would not apply to farms which buy-in and mix compound feedingstuffs with other material;
  • it will be made clear that the detailed standards with which feed businesses would have to comply would apply only where these are relevant to an individual business's operations;
  • it is likely that enforcement authorities would be able, for the purposes of registration under this Regulation, to use lists of businesses already registered under food hygiene rules, and would thus not be faced with the burden of creating a new register;
  • approvals of feed businesses would no longer have to be renewed on a regular five-yearly basis, but would be linked to inspections carried out as necessary by enforcement authorities; and
  • instead of the Regulation coming into force one year after its adoption, its date of application would be linked to the coming into force of the corresponding measure on food hygiene (which is expected to be no earlier than 1 January 2006).

However, the Minister has pointed out that, although discussions have taken place with the European Parliament, these amendments have yet to be adopted by the Parliament.

11.7 The Minister has also provided a revised Regulatory Impact Assessment, which takes into account the above changes. However, the range of costs and benefits would remain essentially as set out in our Report of 5 November 2003, and would become significant only if the provision for compulsory guarantee were to be retained.

Conclusion

11.8 It appears that, if the amendments which have been agreed within the Council are also adopted by the European Parliament later this month, the impact of this proposal would be relatively minor, and we would in that event see no difficulty in the UK agreeing to it. On the other hand, if the Parliament were to decide to insist on the retention of a compulsory financial guarantee, we would want to examine the implications carefully.

11.9 However, it is possible that the measure will come before the Council for adoption before we have had a chance to consider it further. Therefore, although we clear the document, if the Parliament proposes significant changes, particularly as regards compulsory insurance, and the Council is minded to accept them, we ask the Government to report back to us and let us have the opportunity to comment before giving the UK's agreement. In any event, we ask the Minister to keep us informed of progress.


15   These include such measures as listing authorised feed additives, and controls on contaminants. Back

16   OJ No. L.332, 30.12.95, p15. Back

17   Hazard Analysis and Critical Control Points. Back

18   (23671) 10987/02; see HC 63-i (2002-03), para 5 (20 November 2002) and HC 63-xxi (2002-03), para 13 (14 May 2003). Back

19   These include implementation of the proposal as it stands; the removal of the need for financial guarantees; the introduction of some kind of pool arrangement in the short term, pending the development of conventional insurance; and delayed implementation. Back


 
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