Ministry of Agriculture, Fisheries and Food and the Intervention Board : BSE, the cost of a crisis report / by the Comptroller and Auditor General.

  • National Audit Office
Date:
1998
Catalogue details

Licence: Open Government Licence

Credit: Ministry of Agriculture, Fisheries and Food and the Intervention Board : BSE, the cost of a crisis report / by the Comptroller and Auditor General. Source: Wellcome Collection.

    41/130 (page 35)
    Conclusion The National Audit Office concluded that: @ the undercapacity in the rendering industry, and the Board's dependence on it for the effective operation of the Over Thirty Month Scheme, were such that the Board was in a weak position in the negotiation of fees; i the Board was therefore right to bring in financial incentives in October 1996 for the provision of further rendering capacity and a greater diversity of operating methods, using information available from the consultants’ review of the industry's costs; @ the results in April 1997 from invitations for integrated tenders including rendering services indicated that the Board had to continue to obtain such services direct from renderers; and @ it was not until January 1998, that the Board was able to benefit from the results of competitive tenders from individual renderers: this led to contracts with five of the ten plants previously participating in the Scheme at an average cost per tonne of between £82 and £83, leading to savings of some £5 million a year on amounts paid to those plants. Support payments to farmers PEF] The ban on the sale of all over thirty month bovine animals had an immediate impact on the farming element of the beef industry. The numbers of animals eligible for entry into the scheme, the need for appropriate compensation to be determined and paid quickly to farmers, and the effect of a backlog in the acceptance of animals into the scheme, led the National Audit Office to examine: @ how the rates of compensation payable were determined and whether these took account of market practices and the nature of animals eligible for entry into the scheme; and @ how entry of animals into the scheme was organised and whether action was taken to address the impact of a backlog. Compensation payable to farmers Bera The basic compensation payments to farmers are determined by the European Union Beef Management Committee and are part funded by the European Union. Compensation is paid on the basis of the weight and, since August 1996, the category of the animal. From the start of the scheme, the European Union had set a maximum weight limit for Community contributions. Initially, the United Kingdom funded all payments above that limit, with the approval of the Union. Farmers present cattle to the scheme largely via auction markets or directly to abattoirs.