The chief executive of Scotland's largest farmer-owned co-operatives has highlighted notifiable diseases and increasing costs as being among the most significant challenges facing the Scottish red meat industry.

ANM Group Ltd chief executive gave the warning during his address - "Challenges for the Scottish Red Meat Industry and the Role for Co-ops" - at the SAOS annual conference in Carnoustie on Thursday, November 1st.

"Some of the enormous challenges facing the red meat industry come as a result of notifiable diseases, mainly Foot and Mouth Disease (FMD) and bluetongue," he explained. "As regards FMD, it is essential that future contingency plans are drawn up to reflect particular circumstances. In this past outbreak, there are eight infected premises in a very localised area in Surrey which have in turn cost the Scottish livestock industry at least £100 million and this cost is totally out of proportion with the actual event and the potential risk.

"Whilst it is clearly essential to shut the country down immediately live FMD is identified, it is essential that the unwinding takes place much quicker and is based on a balance of risk against economic cost. The current situation where a handful of folk at the centre are required to make decisions about unwinding is quite unfair on them and quite unrealistic in terms of ensuring a proportionate reaction."

But, Mr Pack went on to warn of the potentially greater threat posed by bluetongue emphasising that, whilst the coming winter should provide breathing space from the spread of the disease across Northern Europe, that time must be used to plan accordingly.

He continued: "In particular we must seriously consider a pan-European approach to the disease involving vaccination and ensuring the single market survives. Whilst we can currently stand on the moral high ground, we must consider the fate of these large areas of England which are under impossible restrictions. There is no doubt that this, added to current feed cost pressures and the Single Farm Payment system in England, will see a severe decline in livestock production in England."

Other significant challenges for the sector highlighted by Mr Pack included disproportionate energy and feed costs against a market price that did not provide a break even situation before recent increases.

"As we see with the current problems in our lamb market we have opted for a system with no market support which means the price has to plummet to try and clear the backlog," he went on. "Gluts and famine are a natural outcome of a market which totally relies on balancing supply and demand to fix the price."

Mr Pack concluded: "It would appear that those clamouring for a free market a few years ago did not fully understand what the outcome would be. There appears to be a belief that a free market will pay the price that is required to make production and processing profitable.

"The inevitable outcome of this situation is one of a fast reducing industry and I expect England to take the brunt of this reduction but we can not be complacent in Scotland. The reduction in breeding cows and ewes in the June returns is a foretaste of what will happen, particularly in the case of sheep where we are bound to see an enormous reduction by next June."

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