§ Lord Varley
asked Her Majesty's Government:
When they will announce the future of the over thirty month scheme (OTMS). [HL2510]
§ The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty)
In 1996, at the height of the BSE crisis, the then government and European partners introduced a raft of measures aimed at protecting public health, supporting the market and restoring consumer confidence in beef.
The OTMS was introduced to provide an outlet for cattle affected by the over thirty month rule, which bans beef from cattle more than 30 months old from being sold for human consumption. It is operated under EU Regulation 716/96 and farmers are paid for animals more than 30 months old which are slaughtered and destroyed. The scheme costs around £400 million a year, and more than £3.2 billion has been spent on it since 1996.
The over thirty month rule is currently being reviewed by the Food Standards Agency; although no decisions have been taken it is possible that the review will lead to changes and that beef from older cattle will again be available for human consumption, subject to testing negative for BSE.
This possibilty offers exciting new challenges and opportunities for the UK beef industry. It has led the Government to take a number of strategic actions to assist the industry in preparing for an orderly ret urn to more normal market conditions.
Our officials asked the European Commission to reduce the rates paid to farmers for animals entering the OTMS. On 28 March the EU Beef Management Committee unanimously agreed a proposal by the European Commission. The rates for cows will fall by 20 per cent and the rate for steers, heifers and hulls by 8 per cent. The new rates, which reflect changes to market prices elsewhere in the EU since 1997, are 0.64 euros per kg liveweight for cows and 0.83 euros per kg liveweight for other animals.43WA
The new rates will come into effect on 28 April and will apply to all animals slaughtered from that date. This action will ensure that taxpayers do not pay farmers prices well above the level that they could expect to get on the market and will help discourage the entry of cattle which may be slaughtered for beef following any changes to the rule.
Our officials are setting up a core stakeholders group to explore with the industry the way forward if the rule is changed. They will be talking to the European Commission about how any disruption to the beef market can be minimised and any further changes to the scheme that may be required.
The UK currently imports 30 per cent or around 290,000 tonnes of its domestic beef requirement. Changes to the rule are expected to allow large quantities of cow beef for manufacturing and some prime beef for retail use onto the domestic market, which will assist in reducing the import requirement and increasing the availability of both prime quality and cow beef for export. In order to capitalise on these increased supplies for export and to minimise domestic market distortion, my officials have alerted the European Commission to our intention to seek a change to the 30 month limit in the date based export scheme (DBES) in line with any change to the over thirty month rule.
Our officials are also working with stakeholders to ensure that effective arrangements for BSE testing and removal of vertebral column will be in place.