Memorandum submitted by the RSPCA (CAP
13)
The RSPCA agrees with the strategy in the Vision
for the Common Agricultural Policy that the CAP needs to be reformed
to provide support to farmers more efficiently and be responsive
to consumer demands. It also agrees that funding should shift
from Pillar I to Pillar II if a future CAP is to match developments
on improving animal welfare in species specific sectors. However,
during the next 10 years agriculture will become more open to
global competition as tariffs are reduced. Improving animal welfare
standards has clear financial implications. Many studies show
the theoretical consequences but there have been few actual models
that show what will happen to livestock sectors once decreased
support occurs. The examples used in the Vision report are not
typical of what would happen if trade is liberalised and welfare
standards continue to be raised. So, it is important that social
factors such as animal welfare are built into the Rural development
programmes in the UK and that it is accepted that the market alone
cannot deliver a strong competitive agriculture system with higher
animal welfare and health standards.
1. The RSPCA has long felt that the support
systems of the CAP have not kept pace with developments to improve
the welfare of farmed animals through other mechanisms such as
species specific standards primarily laid down under Directives.
Many of these Directives have started to phase out certain close
confinement methods of farming (eg Directive 1999/74 and Regulation
2001/88 phasing out the battery cage system and the sow stall
respectively and Directive 97/2 whose prohibition of the veal
crate system is finally fully enacted at the end of this year.
2. The RSPCA agrees with the premise of
the Vision for the Common Agricultural Policy that radical change
is required to deliver support to farmers more efficiently and
reduce the negative impact on the environment and animal welfare.
In January 2006 the EU agreed its Animal Welfare Strategy which
lays down for the first time where the EU sees animal welfare
developing in the 2007-12 period. Defra is also considering, for
the first time, an animal welfare component within the Animal
Health and Welfare strategy. So there is a real opportunity to
align the rural development incentives for farmers and producers
with high level strategic goals and ensure that the same strategic
goals built into previous ERDP programmes for the environment
are now applied to improving the welfare and health of farm animals.
This response looks at the main vision drivers of the Treasury
paper to assess their impact on improving animal welfare under
a CAP in 10-15 years timescale.
3. The RSPCA agrees with the position paper
that agriculture should be a sustainable industry and rewarded
for its outputs by the taxpayer where these are producing societal
benefits that cannot be delivered in the market place. The RSPCA
would include animal welfare in these benefits. The RSPCA also
agrees that the industry should be producing to higher levels
of animal welfare. However the two goals as set out in the paper
of producing high welfare standards and being internationally
competitive in all sectors without subsidy or protection are often
incompatible. There is a causal relationship between raising animal
welfare standards (within many instances, an explicit increase
in costs) and the risk of being undermined by imports from third
countries where standards maybe at a lower level. This will lead
to the industry becoming uncompetitive in its own market place
let alone in the export market. It is unclear how the Treasury
report will ensure that this relationship will be effectively
addressed.
4. This relationship has been acknowledged
by the Commission and Member States in the WTO Doha Development
Agenda (DDA) negotiations by the inclusion in the EU's negotiating
mandate to seek clarification as to whether the Green Box includes
payments for animal welfare. This mechanism has also been incorporated
as new rural assistance measures under Regulation 8688/2005. This
allocates many new animal welfare measures for inclusion in the
Rural Development Programmes including paying farmers for meeting
higher animal welfare standards and to adapt to demanding standards
based on EU legislation.
5. There are a number of studies showing
this relationship and its effect on competitiveness. In the egg
sector, there will be an economic consequence of raising welfare
standards under Directive 1999/74. Moving from the standard in
1999 this equates to a price differential of about 11p/dozen eggs
moving to the enriched cage system, 15p moving to a barn multi-tier
system or 36 p/dozen eggs moving to a free range system.[21]
Economic research on laying hen standards in the third countries
expected to export to the EU shows that standards are more intensive
than the 750 cm2 space allowance per bird that will apply from
2012 in the EU. It reveals a competitive advantage from the main
exporting countries. Those using a standard of 350 cm2 would have
a price advantage in the trade in dried eggs of 3p before any
changes in the DDA are enacted. Any agreed changes in tariff reduction
will decrease the competitiveness of the EU egg industry.
6. Similar economic analysis has occurred
in the broiler sector[22]
and the pig sector.[23]
In the broiler sector, where a Directive is currently being negotiated,
economic analysis shows that there will be a 11% increase in cost
of production from the present broiler stocking density of 38
kg live wt/2 to a reduced stocking density of 30 kg lw/m2. This
equates to an annual cost to UK industry of £101 million.
Even keeping the present stocking density but not allowing the
practice of thinning the birds (taking out birds during the growth
cycle as the maximum stocking density is reached) would cost the
industry in the UK £42 million annually. In the pig sector
analysis of the difference between sow production under a higher
welfare scheme in Germany and the baseline standards shows a difference
of £8.45 in production costs per weaner.
7. The market place can recoup some of these
additional costs but without compulsory labelling and retailers
adopting their own standards that ensure they import only products
produced at baseline EU standards the market cannot reward entirely
for higher welfare products. At present there is only mandatory
labelling for shell eggs, and no labelling for egg products where
the majority of the competition will occur from third countries.
Labelling is proposed for broiler chickens under the current EU
draft, but no political agreement has been reached yet.
8. There have not been any long term review
studies on the economic consequences on a livestock industry of
adjusting to lower levels of support whilst moving from a less
intensive system. The four examples in the Vision paper look at
the overall effect on farming but not specifically on animal welfare
consequences. However in Sweden, used in the Vision paper, moves
to outlaw the battery cage system which were agreed prior to Sweden
joining the EU were abandoned post accession due to the fears
about the effects on competitiveness against other EU Member States.
In New Zealand, Australia and Canada, other examples used, moves
to prohibit the battery cage system for laying hens have been
rebuffed by the industry and Government on grounds of competitiveness.
All three countries use laying hen systems that will be prohibited
in the EU from 2012. All three countries also permit standards
for use in pig production that will be phased out in the EU by
2013.
9. The RSPCA agrees with the Vision for
agriculture that the case for continued CAP reform has been made
both in terms of reducing the CAP budget and diverting the budget
from Pillar I to Pillar II. However, despite agreement in the
recent EU Council that the Commission will produce a paper in
2008 to prepare for a new CAP, the agreed budget for the period
up to 2013 will see a 22% cut from the Pillar 2 budget, equating
to a loss of some €19 billion over the budgetary period that
will now not be available for rural development issues. This will
have a direct effect on the four RDPs in the UK where financial
constraints will mean that new issues under the RDR such as animal
welfare will not necessarily get the funding required to ensure
that the EU's agriculture remains competitive. For instance, although
Scotland has agreed to put in three animal welfare funding streams
under its current RDP, it is likely that England will not prioritise
animal welfare as a funding incentive. This will not only penalise
English farmers compared to Welsh and Scottish producers, it may
mean impact on the competitiveness of sectors against mainland
European farmers that will continue to get rural development funding
to produce higher welfare products.
10. In Germany, the present RDP provides
incentives of grants for investment costs in nine sectors (laying
hens, turkeys, pigs, beef and dairy cattle, broilers, suckler
cows, goats and sheep) providing certain higher welfare standards
are met (eg a stocking density of 25 kg/m2 for broiler chickens
as opposed to the proposed 38 kg/m2 under the draft Directive).
There has not yet been a comprehensive economic analysis of the
effect of these different rural development incentive programmes
in the different Member States (or indeed with devolution within
the Member States) on the competitiveness of different livestock
sectors.
11. So the RSPCA agrees with the Vision
that social and welfare benefits should be available to farmers
on the same basis as other Member States and that Pillar II would
support these objectives with a consequent reduction in Pillar
I payments. However, if Member States have discretion in determining
agri-environment payments it is unclear how this will also involve
also precluding unfair competition between Member States.
12. The RSPCA welcomes the cross-compliance
measures that will apply for three animal welfare laws from 2007
(the general standards for farm animals and specific ones for
pigs and calves). This should ensure that a farmer can only receive
a CAP payment if they are applying and meeting animal welfare
legislation in these areas. The framework is there for the animal
welfare pyramid incentive scheme to become a reality.
13. Agreement on the EU budget in December
2005 and the reduction in Pillar II budget means it is important
that any incentives under the RDPs not only have win-win consequences
for more than one issue but also deliver measurable goals against
the national agricultural strategy. It is not clear that this
is being applied in the draft RDPs in the UK.
21 The Case against Cages 2005 RSPCA, Hard boiled
Reality 2001 RSPCA. Back
22
The economic consequences for the broiler industry of legislatively
enforced reductions in maximum stocking density. Centre for Rrual
Research, Exeter Univeristy 2005. Back
23
Effect of higher welfare standards on the costs of producing
beef and pork in the EU. Bondt et al 2004 Agricultural Economics
Research Institute The Hague. Back
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