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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