Government seeks protection for UK egg producers
The Minister for Farming and Environment, Jim Fitzpatrick, has re-affirmed his determination to seek protection for UK egg producers from other EU states who fail to meet the 2012 deadline for a ban on conventional cages.
EU leaders insist that the cage ban will go ahead as planned on January 1 2012, even though observers in the industry believe some countries in southern and eastern Europe will miss the deadline for conversion. The UK egg industry has called for the introduction of code 4 labelling to distinguish between eggs from conventional and enriched cages and an intra-community trade ban to prevent conventional cage eggs from elsewhere in the EU undermining British producers who comply with the new regulation. Mr Fitzpatrick has agreed to press for these measures, and he reaffirmed his commitment during a speech at the Egg and Poultry Industry Conference on November 9.
"Countries have known for some time what was coming. We will be pressing not to allow extra time. We don’t want our producers complying and then others exporting to our market and trying to compromise us," said the Minister. He said the UK Government would continue to argue for both code 4 labelling and a ban on trade within Europe if some countries said they wanted more time to comply.
There is a feeling that others within the EU do not support such measures. Peter Thornton, chief executive of Noble Foods, said the Commission had indicated it did not think code 4 labelling was necessary. "A level playing field is all we are looking for," he said. "If we are not protected from those EU countries that have not invested, we are going to be in a very difficult place."
Mark Williams, chief executive of the British Egg Industry Council, told the Minister the BEIC estimated that anything between 18 and 30 per cent of laying hens within the EU would be illegal by January 1 2012. They would still be in conventional cages. He said there were likely to be large numbers of conventional cages in southern and eastern Europe and the Commission seemed lukewarm about the measures the United Kingdom egg industry wanted introduced to protect egg producers who complied with the regulation. "What’s plan B?" he asked the Minister. Mr Fitzpatrick insisted that he was pressing ahead with plan A rather than thinking of plan B.
The Minister was also questioned by Scottish egg producer John Campbell. It is the industry’s understanding that the UK would be powerless to prevent the importation of cage eggs from outside the EU under World Trade Organisation rules. The industry believes that imports cannot be prevented on animal welfare grounds. When challenged about this issue by John Campbell, the Minister said it was his understanding that action could be taken to defend the UK industry because of a collective agreement in place in the EU.
Peter Thornton said the estimated cost to the egg industry of complying with the new EU directive on cages was £400 million. The industry did not receive Government subsidy – the necessary investment would be found within the industry itself – and that was a very challenging demand. Speaking of the deadline for the conventional cage ban, he said, "The reality is that others are not going to be there. If only seven to 10 per cent of facilities are so far enriched, then it is not going to happen." He said it was vital that UK producers were protected from producers elsewhere who failed to comply with the directive on cage production.
On the cost of eggs, he said that eggs produced in enriched cages would cost 8 to 10p per dozen more than those in conventional cages if producers were to achieve an acceptable return. "We are in for a challenging couple of years ahead," he said.
He said that free range eggs would take up the slack in the market and the increase in external stocking densities under the Lion code would help that to happen, but he warned that it was very important to balance supply and demand. He said he was concerned that unless the industry was careful there would be too many eggs in three or four years’ time. In those circumstances, there would only be one winner – and it would not be either packers or producers.
The Egg and Poultry Industry Conference took place at the Forest of Arden Hotel and Country Club near Coventry. The theme of this year’s conference was ’Growing in a Challenging Environment’.
Taking up the theme, Peter Thornton spoke about this year’s launch of a new free range egg brand by Noble. He said that although the brand was still in its infancy, first year turnover would be about £25 million. He said that the free range market had grown by six per cent over the year and the new ’happy egg co’ brand would account for about 75 per cent of that growth.
There was still room for more growth in egg sales, however, and the best opportunity for the industry was to grow consumption. That was possible, even though eggs were already a huge retail category. Consumers bought five billion eggs a year, the sector was worth £778 million and household penetration was 91 per cent, but there were still opportunities for growth. He said the decision by the British Heart Foundation to abandon its suggested limit of three eggs per week would help in growing the market.
Conference president Eric Reid of Moy Park said eggs and poultry provided the lowest subsidised products on the market. Tens of millions of pounds were spent on other agricultural sectors, but eggs and poultry provided consumers with the most economic source of protein without such huge subsidies. Government could help in one way, he said. He appealed for help with capital allowances to enable the investment needed in the industry.
Another speaker, Martin Redfearn, national agricultural specialist with Barclays Bank, produced figures to challenge the view that finance was in short supply for farmers. He said lending to agriculture by UK banks had increased by 5.7 per cent in 2009 compared to the previous year. Agricultural lending had increased from £11.1 billion to £11.7 billion. He said that the agricultural industry was seen as low risk by banks because the industry had a good record of paying back. He said he had more money available for agricultural loans than he had been able to place this year.
Economist Sean Rickard - senior lecturer in business economics at Cranfield University - offered a view of what was in store for agriculture in the years ahead. He said the world faced food shortages and farmers would be called upon to meet the challenge by increasing productivity. This would only be achieved by making use of science and technology. He took a swipe at the way bio science had been sidelined in recent years. "Unfortunately we have lost our scientific lead because of idiots who would have us go back 50 years," he said. "It is criminal the way our Government has bowed down to our friends in rope sandals."
On a more positive note, he said that the future looked much better for the agricultural industry, and that poultry and eggs were more sustainable than other agricultural sectors.
The British Poultry Council and BOCM Pauls award to the man or woman of the year in the poultry industry was presented this year to Tom Vesey, who will stand down as chairman of the British Free Range Egg Producers Association next month. The award was presented at a banquet following the Egg and Poultry Industry Conference.
It is the first time the award has gone to anyone in the free range sector. Tom said, "I feel very honoured but it is for the free range sector as a whole – not just for me."
