Memorandum submitted by Digby Lidstone-Scott,
Publisher, Pig World magazine (Pigs 11)
EXECUTIVE SUMMARY
1. The English pig industry has been in
decline since 1998 as a result of unilateral United Kingdom legislation,
exceptional circumstances (such as foot-and-mouth in 2001), and
the dominance of multiple retailers. However the industry has
much to offer the nation and remains well organised and determined
to succeed.
2. If the multiple retailers can be persuaded
to adopt a more strategic view of the industry, and if government
forms a pig sector task force to nurture producers' confidence,
there is no reason why the decline cannot be halted and possibly
reversed. The EFRA Committee inquiry could be the catalyst.
Are present problems more than just a cyclical
imbalance between supply and demand?
3. English pigs make up circa 86% of the
United Kingdom pig herd. The herd was subject to the normal vicissitudes
of the "pig cycle" until mid-1998. (See Figures 1 and
2.)
4. Since then there has been no United Kingdom
cycle. The herd has been in sharp decline. The decline was triggered
by global low pig prices in 1998-99 which coincided with the introduction
in January 1999 of the United Kingdom's unilateral sow stall ban.
Are domestic pig welfare standards a principal
reason that English producers have problems competing with those
outside the United Kingdom? Are there other reasons?
5. The sow stall ban cost United Kingdom
producers approximately £323 million in conversion costs
(from stalls to loose-housing on straw).
6. Whilst few producers would wish to return
to using stalls today, the cost of conversion has proved pivotal
to the industry's decline since 1999.
7. It left producers with significant debt
and no buffer to help them through the difficulties ahead. Most
of these difficulties were exceptional:
— Classical swine fever in 2000.
— Foot and mouth disease in 2001.
— PMWS/PDNS (known as "wasting
disease") from 2002 onwards, triggered by movement restrictions
during the outbreaks of classical swine fever and foot and mouth
disease.
— Since July 2007, record feed costs.
8. Better prices during the industry's period
of decline (1998 to the present day) would have given pig producers
the incentive to invest their way through their troubles but the
past two decades have seen increasing dominance by multiple retailers.
Tesco, Asda and other leading retailers use their buying power
ruthlessly to drive down prices.
What could supermarkets and the hospitality industry
do to alleviate pressure on the domestic pig industry?
9. It is important to understand why ways
should be sought to incentivise retailers and foodservice to be
more supportive of British pigmeat.
A successful English pig industry means more
healthy, versatile, competitively-priced food from our own resources
(as highlighted in Peter Walker's white paper of the same name
in the 1970s).
As world food shortages grow feed conversion
efficiency will increasingly become an ethical as well as economic
consideration: pigs are more efficient converters than beef or
sheep.
Pigs are excellent at converting vast quantities
of English co-products into healthy protein. Much of this material
would otherwise go into landfill.
The natural fertiliser produced by pigs replaces
imports of artificial fertiliser from finite resources. The organic
matter and micronutrients in slurry and farmyard manure mean its
benefits extend beyond its nitrogen, phosphate and potash content.
Outdoor pigs enhance the visual diversity of
the countryside whilst indoor pigs have a small visual footprint.
Pig units employ more people per acre than most
other farming sectors and pay is above minimum wage, often in
areas where minimum wage is the norm.
Pig units provide quality employment where skills
are taught (usually involving the industry's own Certificate of
Competence qualifications) and employees can see an industry career
structure. The industry has its own continual professional development
scheme in PIPR (the Pig Industry Professional Register).
Selling off many county council farms means avenues
for youngsters who want to farm in their own right are getting
harder to find but pigs still provide a way in (as they have always
done) for those who are determined to succeed.
A local English supply chain—and there
are lots around the country—makes more sense than importing
pigmeat (and more fertiliser).
— World beating Genetics:
British genetics continue to be much sought after
around the world—the British genetics industry is an ambassador
for the industry and the country as a whole.
10. Although the above points demonstrate
the English pig industry is worthy of support and encouragement,
it is unrealistic to expect the multiple retailers to suspend
the laws of economics for the national good (even if a mechanism
existed).
11. The multiple retailers would benefit,
however, from adopting a more strategic view of their pigmeat
supply chains. Although their use of lower-welfare imported pigmeat
helps them tactically control the price of English pigmeat, they
rely on the domestic industry to:
(a) meet day-to-day fluctuations in demand, and
(b) to signpost their corporate animal welfare
credentials.
12. Adopting a more strategic approach can
be as simple as introducing clear labelling and display rules
for all suppliers, and for all instore staff. Many surveys have
shown the majority of consumers will chose British pigmeat products
over their imported equivalents, provided:
— The signposting is clear, so they
can make their decision in 30 seconds or less (Farming and Food:
The Acid Test, April 2002).
— The price differential is not too
great (British Pig Executive data).
13. When British bacon carrying the Quality
Standard Mark was displayed in segregated "blocks" in
ASDA stores for a test period in 2002, sales increased 3% by volume,
7% by value.
14. Retailers could strategically drive
demand for English pigmeat by:
— Always displaying British product
in clearly signposted blocks, by category—fresh pork, bacon,
sausages and ham.
— Refusing to sell ambiguously labelled
product (either their own, or brand name) that gives the impression
of being British but in fact contains, or may contain, imported
pigmeat. (See Figure 3.)
— Refusing to sell product (either
their own, or brand name) containing pigmeat from production systems
that would be illegal in this country.
15. These measures would probably see their
(the retailers) sales increase by value and volume. The "passing
off" of foreign product as British is particularly pernicious
where the pig industry is concerned because the United Kingdom's
unilateral stalls ban adds 6.4p a kilo to producers' cost of production.
If producers cannot recoup this sum, the industry will continue
in decline. Even when the European Union stalls ban is introduced
in 2013, it will not be a complete ban. Most producers on the
continent will still be allowed to keep sows in stalls for four
weeks (a distinction that will be hard to explain to British consumers).
Can government do more to support the industry,
either directly or through its public procurement policies?
16. The EFRA committee inquiry is helpful
as it will help highlight the importance of the English pig industry.
Defra has been supportive of the industry.
17. The English pig industry has a large
and sophisticated market on its doorstep. But the industry's decline
since 1998 means massive investment in pig unit infrastructure
is now essential. This will only happen if producers have confidence
in the future.
18. In Scotland, the Cabinet Secretary for
Rural Affairs and the Environment recently established a task
force to consider actions to assist the Scottish pig sector. A
similar task force should be established in England. It should
be chaired by a high-profile figure and it should seek to:
— Give producers confidence to invest
in the future of the industry.
— Persuade retailers to adopt a more
strategic approach to domestic supply chains.
— Encourage all public institutions
to source pigmeat that complies with United Kingdom welfare standards.
— Use the task force's deliberations
as a publicity vehicle for English pork and pork products.
September 2008
Annex A
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