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Baroness Byford: My Lords, I thank the Minister for writing to us on this amendment. His letter clearly said that he had listened to the weight of argument about the levels of compensation for slaughtered FMD vaccinates. We are grateful to him for introducing this amendment. It helps to allay the fears of farming colleagues outside this Chamber.

I should still like to draw the House's attention to the rider which the Minister adds to his letter. It relates to a matter that we shall need to address in the long term. I do not raise this issue to worry the Minister now. He said that we should be aware that the general and wider issue of harmonising compensation regimes for animal diseases are being reviewed. The way in which these matters are taken forward may be a subject for debate at a later date. In the mean time, I thank the noble Lord for having listened to the weight of argument in Committee and for his courtesy in responding to us all.

Lord Livsey of Talgarth: My Lords, we on these Benches thank the Minister for introducing this provision. We feel that it offers great assurance following our earlier debates.

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The issue of the valuation of vaccinated animals is very important. I point out to the Minister that the supermarket industry ought to take due note of what is going on. During the last foot and mouth outbreak, it was said that there was no market for vaccinated animals. If this is done properly, the supermarkets will take due note and will pay a fair price. What happens in this respect may give the industry grounds for confidence.

6.45 p.m.

The Countess of Mar: My Lords, I find it extraordinary that there is still dispute as regards what the supermarkets think about vaccinated animals. Animals are being vaccinated all the time. We give our sheep Heptovac vaccinations twice a year against all kinds of nasty diseases. Poultry are vaccinated on a regular basis—as are cattle. What on earth is different in people's minds between vaccination for foot and mouth and all the other vaccinations? I am very pleased that the noble Lord has seen fit to introduce this amendment. I am grateful to him.

Lord Livsey of Talgarth: My Lords, I agree totally with the noble Baroness that we need to banish this idea, and the Government have it in their power to do so.

On Question, amendment agreed to.

Baroness Byford moved Amendment No. 11:


    Page 2, line 40, leave out from "compensation" to end of line 41 and insert "equal to the full market value of the vaccinated animal at the time of vaccination or at the time of slaughter, whichever is the greater."

The noble Baroness said: My Lords, this amendment is grouped with Amendment No. 15 standing in the name of my noble friend Lord Peel.

The recent foot and mouth outbreak has now been analysed in three fact-finding reviews: that of the National Audit Office; the Anderson inquiry; and the Follett inquiry. All three agree that analysis of the figures indicates that action—and inaction—by the Government and by government departments resulted in the slaughter of millions of healthy, unaffected animals.

On the face of it, the owners and keepers of contiguously culled animals were innocent of any active involvement in the spread of foot and mouth. Their animals were not infected; there were no dangerous contacts involved. The decision to end the lives of most of those animals was not taken by vets or farmers to spare them unnecessary suffering. It was taken in pursuit of a government reaction to the situation that they faced. Even the slaughter on official welfare grounds was caused by government-imposed restrictions, not by any failing on the part of the farming community or the vets responsible for the health and well-being of those animals.

Farmers lost income. They incurred costs for which they had not budgeted, not least on expensive disinfectants—some of dubious worth. Their cash-flows were seriously disrupted and many are still

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suffering emotionally. Many of those affected have received no compensation at all. More successful farmers than I would say that there are three major decisions which govern their success each year: what to grow; when to start; and when to harvest. In the case of animals, that is rendered as: when to go to market.

If the Government interfere, they should do so in a way which gives farmers the best possible recompense, while at the same time maintaining openness in their calculation. The Government were not ready for the foot and mouth outbreak. The rules on compensation had not been examined for some time—or had not been examined seriously. Mistakes were made, as has been recognised by the Government and by the Minister. I agree that this should not happen again. But do not penalise the farmers of the future for the inadequacies of the past. I beg to move.

The Earl of Onslow: My Lords, the valuation exercise has been interesting. Some valuations are turning out to be extremely silly. It is self-evident that if you put a pile of pound notes in front of someone and say, "Help yourself", that person will help himself. You cannot blame people for helping themselves. As was reported in The Times this morning, the National Audit Office has cited cases of major over-valuation and over-compensation. That brings government, the farming industry and everyone else involved into disrepute.

Surely it is essential that the basis of the valuation is clear and precise. It should not be open to doubt. Following the last outbreak, some people did not receive money; I am afraid that others received too much. It would be wrong for those involved in the farming industry not to recognise that. I hope that this amendment will make the basis of the valuation clearer from everyone's point of view. I hope that we are talking about a fair market valuation—that is important—not an over-inflated one, but even less an under-inflated one. That is what we must aim at. In that way, people will not use the valuation as a means of blaming others when things go wrong—which happened to a certain extent in the last outbreak.

Earl Peel: My Lords, it may be helpful if I speak to Amendment No. 15. It is grouped with Amendment No. 11.

Disregarding any changes that the Minister wishes to implement in the future—we have seen further evidence of that in the press today; some noble Lords may find it somewhat disquieting—at present the Government compensate owners at the full market value. However, with vaccination likely to play a much greater role in any subsequent outbreak, the compensation issue becomes less generous. Farmers may find themselves worse off if their animals are vaccinated but not slaughtered. Amendment No. 10 deals with slaughtered animals which have been vaccinated. Amendment No. 15 deals with those animals which have been vaccinated but are not slaughtered because they did not contract the disease.

As many noble Lords will be aware, there was some debate during the foot and mouth crisis as to whether vaccination was a viable or desirable option. It has

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always been alleged that the Prime Minister met with Ben Gill, the President of the National Farmers Union, to discuss the issue. Ben Gill said that he would be happy for vaccination to take place provided that those animals were accepted into the food chain. I understand that that idea was dropped for the simple reason that retailers, in particular the supermarkets, said that they were reluctant to accept such animals.

I am sure the Minister will tell us if that is a gross simplification of events. However, if there is any truth in the matter, it highlights the difficulty for farmers with vaccinated animals. There appears to be a stigma against vaccinated animals. Farmers are likely to be worse off and they will receive no compensation unless the animals are slaughtered.

Another possible situation is that a two-tier market may develop by which farmers are paid a lesser rate for vaccinated stock. New subsection (4C) of Amendment No. 10 states:


    "In arriving at a value under subsection (4A) above no account is to be taken of the fact that the animal had been treated with vaccine".

One can deduce from that that the Government are aware that discounted values for vaccinated animals exist, and are likely to exist, thus creating a two-tier market. Should such cases occur, surely the whole vaccination policy will become discredited and farmers will be encouraged to pursue the old slaughter policies—the one thing that we are attempting to get away from.

I fully acknowledge that this a difficult issue for the Government. I also believe that on medical grounds there is no reason why vaccinated animals or their produce should not enter the food chain. But this reluctance to accept vaccinated animals appears to exist. That conflicts with the point which the Minister explained in his letter to me which states:


    "The acceptance of products from vaccinated animals entering the food chain is critical to the viability of a vaccinate-to-live policy".

I am sure we all subscribe to that.

It is a probing amendment. I acknowledge that for the Government to embark on a full compensatory scheme for vaccinated animals would be totally inappropriate. However, we have a real problem which needs to be addressed. How do the Government propose to overcome the problem and give those farmers with vaccinated animals the confidence that those animals and their produce will be received into the food chain without discounted values? Presumably discussions are taking place with the Food Standard Agency, the Consumer Council and in particular the retailers. We deserve an explanation as to how the problem can be resolved if the Government will not step in to offer compensation, thus discriminating against those vaccinated animals when there is compensation for slaughtered animals.

We deserve an explanation from the Minister as to how he and his department will ensure that vaccinated animals are not discriminated against in the market

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place; otherwise I fear that the vaccination scheme will be discredited. Farmers will lose confidence in it. That is the one message we do not want to give out.


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