2 Protection of chickens kept for meat
production
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9606/05
COM(05) 221
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| Draft Directive laying down minimum rules for the protection of chickens kept for meat production
Commission staff working Paper: Annex to the proposal for a Council Directive laying down minimum rules for the protection of chickens kept for meat production — Impact Assessment
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| Legal base | Article 37EC; consultation; QMV
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| Department | Environment, Food and Rural Affairs
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| Basis of consideration | SEM of 2 February 2006
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| Previous Committee Report | HC 34-ii (2005-06), para 2 (13 July 2005)
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| To be discussed in Council | May 2006
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| Committee's assessment | Politically important
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| Committee's decision | For debate in European Standing Committee A
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Background
2.1 Although specific Community provisions rules already exist
for the welfare of laying hens, chickens kept for meat production
are subject only to the general provisions of Directive 98/58/EC[8]
governing the protection of farm animals. However, the Commission
notes that this is an important sector, which gives rise to a
number of significant health and welfare problems, most of which
are caused by genetic selection of birds aimed at achieving high
growth rates. It therefore put forward in May 2005 this proposal
aimed specifically at improving the welfare of intensively farmed
chickens by laying down minimum technical and management requirements
for their protection. These would apply to all farming systems,
except breeding establishments and hatcheries, and those with
fewer than 100 chickens, and would set conditions from the time
chicks are brought to the production site until they leave for
slaughter. They would also involve two sets of standards according
to whether the stocking density was above or below 30kg liveweight
per square metre, subject to a maximum permissible density of
38kg.
2.2 As we noted in our report of 13 July 2005, the
UK had welcomed the proposal, pointing out that the Farm Animal
Welfare Council and welfare groups had long had concerns over
this sector, but it also had reservations both on the justification
for some of the technical details, and on whether overall the
benefits justified the economic, compliance, enforcement and administrative
costs. In addition, it doubted whether the inspection and enforcement
envisaged was feasible, and said that it was looking for a more
pragmatic mechanism, for which purpose it was developing a Regulatory
Impact Assessment. We therefore said that we intended to hold
the document under scrutiny pending receipt of that further information,
but that we were, in the meantime, drawing the proposal to the
attention of the House.
Supplementary Explanatory Memorandum of 2 February
2006
2.3 We have now received the promised Regulatory
Impact Assessment under cover of a supplementary Explanatory Memorandum
from the Minister for Local Environment, Marine and Animal Welfare
at the Department for Environment, Food and Rural Affairs (Mr
Ben Bradshaw). This points out that 80% of UK production in this
sector is controlled by five companies, is expected to continue
at around 850 million birds a year, and has a value of about £880
million, in addition to which chicken represents over 30% of meat
sold by weight, with consumption exceeding that of any other meat.
It further estimates that production in England takes place on
about 1,530 holdings, of which about 4% have stocking densities
below 30kg per square metre, about 80% have a stocking density
between 30 and 38kg (and would thus have to comply with enhanced
welfare standards), and about 16% a density above 38kg (and would
thus have to reduce their density at least to that latter figure).
2.4 The Assessment says that a survey has shown that
most broiler producers consider that it would be uneconomic to
stock at 30kg per square metre, and that consequently almost all
conventional producers would choose to apply the higher stocking
limit and comply with the additional requirements this would entail.[9]
The industry estimates that the capital costs of this would be
around £12.4 million, together with annual running costs
of £500,000, though independent assessors consider that the
capital costs could be between £60 and £100 million,
and that, at current profit levels, producers with older buildings
would not be able to justify this expenditure. Moreover, in order
to provide a safety margin, many producers — including those
already operating with a density below 38kg per square metre —
expect to reduce their density, either by raising fewer birds
or by extending their accommodation. The overall cost of this
to the industry is put at £7.5 million a year, of which £400,000
would represent the reduction in the annual net margin arising
from first of these courses, whilst the second would give rise
to a capital cost of £11 million, and increased production
costs of £6 million a year.
2.5 Taking all these factors into consideration,
as well as the costs arising from enforcement and from an increased
need for training, the Assessment puts the capital cost of the
proposals to the industry at £23.7 million, with an ongoing
annual cost of £8.1 million, equivalent to an overall annual
cost of £10.5 million, if the capital costs are spread over
ten years. These costs would, however, be offset to a degree if,
as expected, the increased prices which would arise as a result
of a reduction in production brought about by the new requirements
caused some producers to leave the industry. In addition, the
Government would incur enforcement costs of between £1.3
and £1.7 million a year in England.
2.6 The Assessment also seeks to estimate the benefits
of the proposal, arising essentially from the public good represented
by the improved welfare of broiler chickens, as measured by the
public's willingness to pay for this. On the basis of the replies
provided, it suggests that the aggregate policy benefit could
be around £158 million a year, with the greatest value being
placed on a reduction in stocking density. However, it also notes
that those in the higher social grades showed a greater willingness
to pay, and that a significant minority of consumers saw no such
benefit.
Conclusion
2.7 On the face of it, the Regulatory Impact Assessment
provided by the Government appears to suggest that the public
good benefits arising from the introduction of improved welfare
standards for broiler chickens greatly outweigh the likely costs
to the industry. However, this conclusion does depend heavily
upon the increased price which consumers in the higher income
groups are said to be willing to pay for these improvements, and
on the weight which can reliably be attached to the figure of
£158 million quoted in the Assessment. Likewise, it seems
to us that the estimated costs to the industry may well understate
the true position, in that it is not clear how far they take into
account the likelihood that some producers will find the cost
of adjusting to the new requirement prohibitive, and so cease
production.
2.8 In view of this, and the fact that the Government
continues to have reservations about the proposed enforcement
and inspection regime, we are recommending the proposals for debate
in European Standing Committee.
8 OJ No. L.221, 8.8.1998, p.23. Back
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