Select Committee on Environment, Food and Rural Affairs Written Evidence


Memorandum submitted by Meat and Livestock Commission (Appendix 31)

INTRODUCTION

  MLC is a non-departmental public body established under the Agriculture Act 1967 to promote efficiency in the British livestock and livestock products industry. MLC is funded by statutory levies raised on the sector. Almost uniquely MLC has a statutory responsibility to the Consumer.

  MLC welcomes the proposed review and is therefore content that legislative provision is contemplated. It would however be keen to know how the normal checks and balances in the Parliamentary process will be accommodated in the proposed procedure.

  On the basis that the review will go ahead, detailed below is a brief synopsis of MLC.

KEY ACHIEVEMENTS

  MLC has:

  1.  Helped to restore the market with consumption and image of red meat back to pre-BSE levels.

  2.  Helped the industry manage its way through major disease crises.

  3.  Implemented a federal structure making our organisation more responsive to stakeholders.

  4.  Improved the efficiency of the organisation.

OUR KEY GOALS

  MLC's activities are now clearly focussed in three key areas:

  1.  Creating a sustainable livestock sector, through improvements in business performance and the pursuit of greater transparency along the supply chain.

  2.  Encouraging the production of high quality differentiated products through the introduction of consumer facing quality schemes and innovative marketing campaigns.

  3.  Encouraging export growth.

EXTERNAL PERSPECTIVE

  MLC understands managing change. It has helped chart the industry's course through the difficult times following BSE, Classical Swine Fever and Foot and Mouth Disease. With the help of MLC the industry now enjoys a robust UK marketplace with both the image and consumption of red meat recovered to pre-BSE levels. Strong demand has however sucked in higher proportions of imports and MLC is now setting about recovering market share for British producers.

  The current work of MLC is centred around improving the sector's competitiveness, profitability and product differentiation. These activities are designed to reduce cost of production, recover market share and then defend the sector against further import substitution as WTO negotiations free up global trade.

INTERNAL CHANGE

  MLC has responded to the Government's devolution programme, creating a federal structure that takes the work of MLC nearer to its stakeholders in England, Scotland and Wales together with an autonomous pig representation. The structure delivers a more flexible responsive organisation meeting the different regional needs of a devolved livestock industry. There is now greater transparency and accountability within our modernised organisation.

  MLC has also created a greater commerciality within its structure providing inspection services to the industry based around its technical expertise. Indeed EFSIS Ltd. (60% owned by MLC) now has a turnover of £6.5 million with a 5% net margin. Commercial profits are ploughed back into industry good work, creating value for all.

  Throughout this considerable internal change, MLC has not lost sight of the need to improve its own efficiency. Over the last five years it has; reduced its headcount by 27%, reduced its administration costs by 28% and reduced the levy collection expenses as a proportion of gross levy from 5.5% to 2.48%.

LOOKING AHEAD

  The vision for the future is of a livestock sector producing quality products that meet exacting market requirements, whilst at the same time caring for and protecting our natural resources. MLC ensures its programmes for production efficiency are consistent with government's aims on environmental protection. It is however only with economic success that the industry can truly deliver sustainability.

  Organisations however cannot stand still and notwithstanding the tremendous adjustment already experienced by the livestock sector MLC is aware the sector now has to cope with the largest change in a generation with the introduction of the Single Payment Scheme and the potential for increased competition as WTO negotiations free up world markets.

  MLC sees the recovery of export markets as vital to improving profitability to the sector.

  MLC had already anticipated the needs of the sector with its work in the Red Meat Industry Forum targeted to improve efficiency throughout the supply chain. There are also extensive work programmes, in partnership with Defra and the industry to help the sector make the required transition to a reformed CAP.

  New marketing programmes are designed to differentiate the British product based on enhanced quality attributes. The technical programme will deliver lower costs of production and integrate with the Government animal health and welfare strategy.

  MLC aims to help achieve a vibrant, profitable and therefore sustainable UK meat and livestock business in the face of global competition. MLC policy and work streams are all geared towards delivering this goal.

CONCLUSION

  The British livestock industry has just come out of a decade of hardship brought about by disease and poor profitability. It is now facing its biggest change for a generation as a result of CAP Reform. This situation is exacerbated by increased global competition that will intensify with greater trade liberalisation coming out of WTO negotiations.

  For these reasons MLC believes that market failure still exists in the livestock sector and the industry therefore needs the continued support of effective and efficient levy board structures to enable it to develop sustainable and viable forms of production delivering environmental benefits and products consumers want to buy.

Meat and Livestock Commission

February 2005





 
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