The pig industry is highly competitive and is well known for being cyclical. The last ten years have seen a steady decline in the scale and productivity of the English pig industry and an increase in the pig meat imported into the UK to satisfy consumer demand. UK pigs cost more to produce than their EU counterparts, but the price received by farmers for their pigs does not appear to be sufficient to cover the rising costs of production or provide sufficient margins to enable investment in more efficient production methods. The lack of transparency in the supply chain leads farmers to form the view that they are not getting their fair share. The industry blames the high cost of production on the effects of disease outbreaks, high feed prices, burdensome environmental regulations and the high cost of the introduction of new welfare standards of housing for pigs in 1999. However, evidence to the Committee has questioned whether pig production is as efficient as it could be in the UK, whether carcase utilisation could be improved, and whether there is sufficient demand to support both producers and processors in the supply chain.

The UK Government assisted the pig industry with a one-off restructuring grant in 2000 but has said that it will not provide further funding to assist producers with the cost of high welfare housing or the cost of implementing environmental regulations. The Committee considers that, despite its reluctance to provide further grants for the industry, the Government has an important role to play in facilitating round table discussions to ensure better cooperation within the pig supply chain. These discussions could help the industry identify how it can help itself to improve its efficiency and productivity through health, welfare, research and marketing strategies. Defra must continue to advise other Government departments and public bodies on the welfare standards of farm assurance schemes in order to encourage them to adopt a more innovative approach in public sector procurement of pig meat. Defra must continue to liaise closely with the industry on its Health and Welfare Council and also continue to fund research into the pig-specific diseases which have severely impacted on the industry in recent years.

We believe that the Government should discuss with the Scottish administration the common issues facing both Scottish and English pig industries.

Pig producers are rightly proud of their high welfare standards, but we do not consider that they have successfully promoted to the consumer the justification for the higher cost of English pig meat. Retailers and catering suppliers are responsible for ensuring that labelling of pig meat products is clear and unambiguous, but producers, animal welfare groups such as the RSPCA, and Government, have a role in making certain that consumers understand the difference between the standards of welfare in the various methods of pig production and ensuring that pig meat produced in the UK is of a high welfare standard.