Government should not try to stop farmers exporting animals for slaughter, the Agriculture Minister told a Tynwald scrutiny committee.
Phil Gawne and his department’s chief executive Richard Lole were giving evidence for a second time to the Environment and Infrastructure policy review committee which is investigating the Countryside Care Scheme.
Farmers packed into the public gallery at the Legislative Council to hear them give their evidence.
The Countryside Care Scheme was introduced in April 2009 to replace the old system of production subsidies. But there is continuing concern about its impact on the farming industry and the Meat Plant.
Committee chairman Dudley Butt MLC said the committee had heard claims that individuals were deliberately exporting live animals to undermine the viability of the Meat Plant.
Mr Gawne replied that it was difficult to prove as nobody was going to openly admit they were trying to undermine the abattoir.
But he said: ’We should not have government trying to stop people exporting - that’s their decision.
‘As soon as you start putting restrictions on exports you effectively say to the Meat Plant “you can be as inefficient as you wish”. While I would certainly have concerns about people exporting to deliberately undermine the Meat Plant - deep concerns – I don’t believe a heavy-handed government response is going to help. You should use the carrot not the stick.’
Mr Gawne insisted that the old system of production subsidies wasn’t working and there had been almost universal support for the need to change.
He said it would always be constant struggle to make the Meat Plant run profitability as it didn’t have the throughput of larger operations across - and even larger concerns in the UK were struggling.
‘There will always be an element of subsidy for the Meat Plant?’ Mr Butt asked.
‘You never say never. It is possible to have a Meat Plant that wasn’t subsidised by government,’ the Minister replied.
Committee member Zac Hall (Onchan) why a verbal agreement with Meat Plant directors about equivalency to UK average prices made in April 2009 never became an official guarantee.
Mr Gawne said he couldn’t imagine lasting very long as Minister if he were to offer these sort of open-ended guarantees.
Turning to problems facing the dairy industry and the Creamery, Mr Gawne said there were fears that changes in EU quotas could result in the market being flooded with cheap milk but added the impact might not be that significant here.
He said the answer to the Creamery’s problems lay in its own hands - and adding 1p to the price of a litre of milk would ‘completely overshadow’ any support that could be offered through the Countryside Care Scheme. Mr Gawne said the Creamery had taken £500,000 out of its cost structure. He revealed Treasury had approved a loan to the Creamery but the directors had declined that loan.