30/11/2009

Green shoots’ is a phrase that has been used often in recent months to highlight the first signs of recovery in world financial markets. This phrase could also be used to describe the Welsh beef and lamb sectors in 2009, but these ‘shoots’ must not be strangled by thorny weeds – otherwise known as regulation, cost and bureaucracy – warns Dai Davies, NFU Cymru President, at the Royal Welsh Winter Fair.

Dai Davies said, “Undoubtedly, this year has been a better year for red meat prices compared to many we have seen in recent times and prime cattle and prime lamb prices are both up on the same period last year. Praise must be given to Hybu Cig Cymru for this increase as we continue to see significant growth in export markets and in consumer recognition of Welsh beef and lamb.

“However we must not forget that favourable exchange rates have been an important factor in 2009, this has made the price of imports relatively more expensive and our exports more competitive. We cannot base the future of red meat production in Wales on the vagaries of the euro: sterling exchange rate. This is why we must continue to concentrate on the marketing and promotion of red meat at home and abroad.�

“Profitability is not just about increasing the value of sales, however, it is also about keeping costs to a minimum and my concern is the cumulative cost, on producers, of a number of new regulations facing Welsh farmers.�

Ed Bailey, NFU Cymru Vice President, also speaking from the Winter Fair said, “Our major concern is the impact of sheep EID and individual movement recording. Our opposition to this is well documented and remains so. New electronic tags will cost farmers approximately 65p to £1 extra per sheep and a number of farmers will also need to consider investment in reading equipment running into hundreds of pounds. It is also the time that will be spent reading and recording individual identities for record keeping purposes and the threat of penalties from official inspections that concerns sheep producers.

“Also, earlier this month the Food Standards Agency Board approved a paper that, if approved by Ministers, could mean the industry paying for the entire cost of meat controls and inspections in the UK. These additional costs would no doubt be passed back down the chain and be reflected in the producer price rather than retail price.

“The Environment Agency proposals to increase groundwater authorisation charges for disposing of sheep dip have also bitterly disappointed the Union. In particular, the costs associated with applying for an authorisation to dispose of enzyme treated sheep dip. The costs proposed give absolutely no encouragement to people wishing to use the enzyme treatment which helps mitigate potential environmental problems.

Mr Bailey concluded, “Each regulation on its own may not seem that big but the accumulative burden in terms of cost and time spent in complying with all these regulations cannot be underestimated. What may appear on the surface, through improved liveweight and deadweight prices, as a prosperous year for the Welsh livestock sector hides the fact that costs remain a serious issue for livestock farmers in Wales.�