SAMW presentation and lunch

Douglas Scott attended the SAMW presentation and lunch. There were two guest speakers, Jim McLaren – President of NFUS and Martin Palmer Project Director (AHDB).

JM started by saying that everyone present whether it be from production, breeding through to the finished product require sustainability throughout the chain. Farmers need to up their game; instead of phoning their President when they only get £10 per head for their lambs they need to ask why they are producing lambs that only achieve £10 per head. They need to know their markets better.

He talked about decoupling and how it had led to a reduction in stock numbers in the more disadvantaged areas. Touching on headage payments and measures possible through Article 68 JM said that he was not proposing supporting headage payments but in a rather confusing address lamented how production had become divorced from 'activity'.

There was a need to re-attach that he felt was spelt out in the NFUS 'Manifesto for the Hills'. The manifesto puts forward a three-part package of policy options:
1 A re-modelled Less Favoured Areas Support Scheme, focused on targeting funding at active production
2 A revitalised list of Land Managers Options under the non-competitive element of the Scotland Rural Development Programme through activity linked delivery and increasing the pot.
3 Retention of the Beef Calf Scheme – JM accepted that the existing scheme had not worked because of the reduction in suckler cow numbers but he was not as yet pushing for enhanced payments.

JM said the union recognises that there is no new money. It is more likely that he would support movement from competitive to non competitive bids to slow the decline of stock numbers.

Maximising the value out of animals was increasingly important as consumers trade down in the economic downturn. Too much emphasis was attached to the dearer cuts and there was a need to put value into the bottom end of the market. He claimed “there is huge scope”.

Value of sterling was making imports expensive. The Irish are seeking 'Sterling equalisation schemes' pegging the euro at 80p. It is unlikely to comply with any EU regulations and NFUS would fight this.

JM touched on Regulatory Burden. The list of regulations that could be reduced is endless and he incidenced Stem Cell testing as a measure that should not have been placed on the meat industry. MHS charges, Sheep ID, fallen stock etc all increase costs. He felt that there was an opportunity to use the 'Credit Crunch' to remove regulation and to invigorate rather than have people made unemployed. He also observed that, if you could obtain loans, there has never been a better time to invest since interest rates were so low.

JM closed confirming that he himself would be pulling out of dairying and he would have a suckler herd by the end of 2009.

Martin Palmer gave an update on the progress of the Added Value Project for QMS, funded by the Scottish Government. This was an attempt to increase value from the fifth quarter and reduce costs of waste disposal.

MP started by making the observation that the agriculture and meat industry might well be better placed and likely to suffer less from the Credit Crunch but rationalisation was still going to affect the industry. There would continually be pressures on margins.

Later this year the project would take a collaborative route to employ specialists to examine harvesting of by products and would include 15 keys areas:-
Category 1, 2 and 3 waste and its definition
Inspection of livers, hearts etc
Edible Offal specifications
Feedback to farmers on liver fluke, hide and skin damage etc.
Fat utilisation
Gut content disposal costs
Pet Food
Sheep and Pig Runner usage
Tripe
Feet (one shop in Brixton sells 1000 per week sourced from Ireland)
Blood
Pharmaceutical requirements
Work on Hides and Skins

The project, as we heard previously at a Stirling Seminar, would look at marketing through bulking up. A Meet the Buyer seminar for exports would be held. Industry is more than happy to co-operate with the project but MP did emphasise that he was aware of established supply chains and would not want to steal customers but enhance returns.

In the question and answer session Alan Jess accused MHS of “over enthusiastic inspection” and Archie Drummond from MHS in Scotland replied that he had noted that but felt that MHS did what it had to do – that was prescribed.

Another question revealed that there could be moves afoot to remove cattle passports in favour of electronic identification (and recording). Government is apparently supportive of this.