25 June 2018 | Online since 2003

10 August 2017

Chief Executive Comment - August 2017

After much toing and froing between the European Commission and the Committee of 28 EU Member State ‘experts’, an agreement has finally been reached to extend the 12-week derogation period to 16 weeks for the marketing of free range eggs during a housing order.
While this is not as good as we would have liked and argued for, it is an improvement on the situation that applied last year. You will remember that last winter the housing order in England’s Higher Risk Areas lasted for nearly 19 weeks, creating a crisis of uncertainty as to whether eggs from free range farms would have to be downgraded to barn. In the end, the industry and retailers agreed to oversticker free range egg packs with wording explaining that the eggs were from free hens temporarily housed in a barn but this solution is built on a dubious legal interpretation which Defra is, at this moment, revisiting so as to provide more detailed legal guidance. It is unlikely that this guidance will be sympathetic to the use of overstickering again this coming winter.
So, while 16 weeks is an improvement, it may not help producers in HRAs maintain their free range status if we have another housing order of the same magnitude as last winter. Our starting point in the negotiation with the Commission (and Defra) was that the derogation should last as long as the housing order imposed by the Government (through its Chief Veterinary Officer - CVO), but the Commission (and Defra) argued that it could not be unlimited as consumers need to have confidence that free range hens will spend a quantified amount of time outdoors.
When I asked the Commission why 12 weeks was chosen, the response was that it was an ‘arbitrary’ figure with no specific logic behind it.  This left open an opportunity for us to counter with a better ‘arbitrary’ figure of 20 weeks. The Commission went away and thought about it and came back with the winter garden idea to extend the derogation from 12 weeks; the larger the winter garden/veranda, the longer the derogation proposed with options of both 16 and 20 weeks being offered.
Winter gardens/verandas come at some considerable cost and the proposal that a winter garden extension of the same size as the shed could give an extra 8 weeks of free range premium (for a 20-week derogation in total) was not commercially viable. Even a winter garden extension of 30% of the size of the house for an extra 4 weeks of free range premium (a 16-week derogation) was stretching commercial viability. We reported back to both Defra (which sits on the EU ‘experts’ Committee) and the Commission that the 20-week proposal was out of the question, and the 30% winter garden for a 16-week derogation was unlikely to be taken up by producers in large numbers.
It was therefore with some relief that the Commission came up with 16 weeks without the need to erect a winter garden, although the concept of winter gardens is still very much on the table as being part of the solution for housing hens during an AI crisis while maintaining our free-range (FR) status. It is unlikely to be a factor in this winter’s solution but will probably re-emerge next year as a proposal to extend beyond 16 weeks, if necessary, following the experiences of this coming winter.
The procedure now is that the 16-week derogation, agreed at Committee, needs to ratified through endless EU procedures. These include: an inter-service consultation with the other Directorates of the European Commission; a month long online consultation with stakeholders including consumers; formal translation of draft legal texts in all the EU languages; and rubber stamping by both the Council of Ministers and the European Parliament. After all that, the EU egg marketing regulation will be formally amended but this will not be before mid-December.
Between now and December, when the agreement is enacted into EU law, anything could happen but it is highly unlikely that the 16-week compromise agreed in Committee will be changed.
The Commission’s proposal also included another improvement in that the clock for the housing order will only start ticking when a flock is placed in a shed, rather than when imposed by the CVO. The Commission provided some worked examples to explain how this could work as shown overleaf.
The second, or middle example, of the three shown in the graphic above illustrates most simply what would happen if the CVO announces a 28-week housing order (hopefully a worst case scenario!). In this case the 36-week flock at the beginning of the housing order has 16 weeks of free range status before being downgraded to barn for 12 weeks. This is four weeks more of free range premium than would have applied last year.
If you now look at the bottom scenario, with a 54-week flock approaching the end of lay, you can see that this flock is culled half way through the housing order and only loses 2 weeks of FR status. When the pullets are introduced for the next flock, the 16-week clock starts ticking again with no further loss of FR status. In practice, most producers would cull the flock earlier, introduce the new flock earlier and have no loss of status. Indeed, by extending or shortening the life of the flock, and changing the turn round and cleaning period, the housing order could be managed so as to minimise or negate altogether the loss of FR status.
From a producers’ point of news, this change is favourable although it could prove to be a nightmare to manage for packers, auditors and EMIs. This probably explains why some industry representatives fought very hard to stop this new interpretation of the housing order timeframe but as a Commission representative said: “ I can’t understand why the industry wants the housing order timer to apply to their flocks when their sheds are empty!”.