FSA considers withdrawing £25m meat hygiene subsidy

The FSA board will meet on Tuesday (November 10), to review the Agency’s current policy which subsidies official inspections of abattoirs and cutting plants.

Tim Smith, the FSA chief executive, said: “We are asking the FSA Board to consider whether the continued provision of a subsidy by the FSA is consistent with its position as regulator.”

Mr Smith argued the £25 million could be better spent elsewhere. He said: “A significant part of the FSA’s budget is required to subsidise the meat processing industry which limits the Agency’s ability to do as much as we would like in work such as dietary health, campaigns, research and information for consumers.”

The Meat Hygiene Service, which undertakes the controls in Great Britain, has reduced its operating costs from £91m in 2006/07 to £69m in 2009/10 through a series of efficiency savings.

Today the industry pays 35 per cent towards the cost of controls, around £24 million of the £69 million total cost. The remainder is funded by the Government – £20m from Defra and £25m from the FSA.

The FSA says full cost recovery would have little impact on retail prices – the price of a whole chicken retailing at £4 would rise by less than a penny (0.8p) and the price on 500g of lean mince retailing at £1.92 would rise by less than half a penny (0.47p).

However, Nigel Miller, NFU Scotland’s vice-president, said costs would inevitably be transferred down the chain through lower prices to farmers and full cost recovery would put many abattoirs out of business.

“Scotland’s abattoirs remain under pressure, with many plants struggling on tight margins, increased regulation and costs of compliance. Heaping additional cost onto Scotland’s plants could further undermine an abattoir sector in Scotland that is already shrinking and challenge the Scottish Government’s own ambitions to grow our red meat sector,” he said.

The FSA says if full costs are not recovered then there should be a plan to achieve full cost recovery within an agreed period or explicit reasons for the subsidy continuing should be set out.

The board paper on UK meat controls is published today (Friday, November 6) on the FSA website and will be considered at the meeting next week.

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