Lord Rooker looking for farmer views on cost sharing at Royal Show

Thursday sees the Royal Show throw open its gates to visitors and this year, DEFRA minister Lord Rooker is inviting farmers to a meeting at the event (2.30pm) to seek their views on DEFRA’s Responsibility and Cost Sharing initiative.

He has a vision of Whitehall letting go of animal health and welfare policy decisions with a new independent body (see panel) taking them on. And once a system is in place, he believes there will be fewer disease outbreaks, thereby reducing the associated costs to both farmers and the public.

But it has proved a divisive issue, sparking reaction across the farming sector in a recent series of farmer meetings and on the FWiSpace forums. There were claims that it is “simply a public relations exercise trying hard to camouflage the government’s intention to opt out of paying compensation to those businesses destroyed by disease outbreak”.

So what are the potential benefits to industry, how far is DEFRA willing to go, and will it be affordable? Lord Rooker talks exclusively to FWi.

Why is DEFRA pursuing its policy of sharing responsibility and cost?

“First, it hasn’t just appeared out of the woodwork, it was on the DEFRA agenda since the 2001 foot-and-mouth outbreak. And there had been discussions on developing a better partnership with industry on disease control.

“We don’t just want to reduce DEFRA’s costs, but also the industry’s costs, and we can’t work in isolation to achieve this.

“Second, the EU is itself starting to develop a policy on cost sharing. But we put to them [the EU] that you can’t just do cost sharing, you need to bring in an element of responsibility sharing. We don’t want something forced on us by the EU that suits other countries, we want a system that suits England, or preferably the whole of Great Britain.

“Finally, we want more farmers buying into risk analysis and taking disease precautions.”

Is it simply a means of getting out of paying compensation?

“No, it isn’t. We are not simply trying to shift DEFRA’s animal health budget on to the industry, this is not the objective.”

How far is DEFRA willing to go?

“Whitehall has to let go, which means DEFRA has to be prepared to share responsibility and decision-making with a new body. We are prepared to go as far as the industry and wider community wants to go. My question to industry now is: How much responsibility does it want to take on?

“Sometimes you have to make difficult decisions which can prove very unpopular, and at the moment, industry can take a degree of comfort by saying ‘well, the minister’s decided this’. This is where the buck stops.”

Does this mean we could see farmers deciding badger culling policy?

“TB is the most serious disease and it costs us a fortune, £90m a year in overall costs. If responsibility and cost sharing means anything, it has to cover every disease, every action on fighting the disease, every action on preventing the disease, and every action relating to disease compensation.”

What are the potential benefits to the industry?

“I listened to some farmers at the recent meetings and I do accept some came along willing to learn, while others were sceptical. Some said that they were already doing this on farm, like animal health plans, on-farm strategy.

“In fact I was on a farm hundreds of miles away from the Surrey foot-and-mouth area last year and had to get out of my car a quarter of a mile from the farm, walk on a disinfectant pad and spray the car wheels with disinfectant. I said: ‘It was bloody good having these biosecurity measures. Is it in response to the outbreak?’ They replied: ‘No – we have this every day of the year’, and this is how the farm protects itself.

“So if we could get it up and running, over a period of time the cost of animal disease will be less for the whole industry, a combination of fewer and smaller outbreaks. That will reduce costs to the industry and to the taxpayer.

“But I can’t say there will never be any disease outbreaks, as there are always new diseases, particularly with climate change, and we have to be ready for new diseases.

“So we are going to get diseases, but how we fight them and how we prepare will have a cost implication. If we work together, I guarantee it will be less costly than no preparedness at all, which will result in losing more animals and much greater disruption to the industry.”

What is the timescale?

“Not overnight. We had a discussion exercise with the industry on how to make a policy and we will be collecting thoughts on this at the Royal Show (3-6 July).

“It will go out for full consultation on a formal policy by about July or later this year with a view of having some legislation ready for autumn of 2009. It will be 2011 before we have something up and running. But the timing may move, depending on factors such as timing of the next General Election.”

Will you listen to farmers at the Royal Show?

“Yes, we will listen to them. They do have the chance to influence policy. We haven’t made any decisions yet.

“We want farmers to come along and say should it be just exotic diseases, or just endemic, and how do they want their say to be made, do they want the minister to make some of the decisions and what sort of body do they want to see. We are still open to what farmers have to say.”

How will DEFRA ensure it is affordable?

“Long term, I hope this policy will have less cost on industry, as it will have fewer outbreaks and they will be easier to control. It is very difficult to prove that, I accept that, until we do it.

“What farmers can’t do, as there is no market out there, is to get some insurance. So we want a system like quasi-insurance.

“We are not in the blame game. But some farmers may need to up their game on biosecurity. Therefore, I would like to see a system where if you do this and that, you can pay less into the cost-sharing disease fund. I would like to see a system where they are rewarded for doing things rather than feel they are being charged.

“These things could include having an animal health plan, a good on-farm strategy, or getting involved in risk management. These units will be more disease free and, consequently, get, say, a 50% discount.

“On cost sharing, a crude way is via a slaughterhouse levy, but this leaves out many animals and feed manufacturers. We have a whole food chain and one-third of what we grow is for animal feed. The broader the base, the less people pay – it’s a bit like income tax.”

This is an England policy, so how could it work under devolution?

“Animal disease does not respect borders. It makes sense for Northern Ireland colleagues to work in conjunction with the Republic of Ireland. And likewise, the rest of us make up another island. So it makes sense to have common disease policy on imports, ports of entry and all that kind of thing.

“We want trade across the English/Welsh border and English/Scottish border to continue unhindered and it is in everyone’s interest to have similar systems. I’m not saying it should be the same, but it makes sense to have as much of a Great Britain policy as possible.

“Remember, the Animal Health Agency is a GB-wide body, as are the Rural Payments Agency and Food Standards Agency. They find satisfactory arrangements working with the Scottish government and Welsh Assembly, so it is possible to have GB bodies working under devolution.

“Control of disease and maintaining trade is the key factor, not political expedience.”

Thursday 3rd July Open Meeting at the Royal Show, Stoneleigh

Meeting starts at 2.30pm

Places are free of charge and must be reserved in advance. To book your place please contact Laura Cruse on 024 7685 8271, email laurac@rase.org.uk or register online.

Responsibility sharing options

Option A – greater dialogue but minister retains responsibility

Option B – statutory advisory body like FAWC, but minister still decides

Option C – new body with government and industry representatives taking on responsibility

Option D – industry mutual organisation which all farmers need to be member to operate

Cost sharing options

Option 1 – levy on livestock at slaughter and milk collected

Option 2 – annual levy based on numbers of animals kept

Option 3 – product or service charge such as charge on sale of animal

Option 4 – insurance