Application for Bovine Spongiform Encephalopathy (BSE) negligible risk Status for Scotland: consultation

Annex B: Partial Business and Regulatory Impact Assessment

Title of Proposal

The application for Bovine Spongiform Encephalopathy ( BSE) Negligible Risk Status for Scotland.

Purpose and intended effect

• Background

The Scottish Government is carrying out a 5 week consultation to seek views/comments on an application for BSE Negligible Risk status for Scotland. The World Organisation for Animal Health ( OIE) classifies the BSE risk status of the cattle population of a country on the basis of a risk assessment and other criteria. The cattle population of a country can be classified into three categories: negligible BSE risk, controlled BSE risk or undetermined BSE risk ( NR, CR and UR respectively). NR status is defined as a country or region where a risk analysis has concluded (and has been accepted by the OIE), that there are sufficient surveillance and controls in place and that either there has never been a case of BSE reported, or any reported BSE case was imported or that any positive BSE case was born at least 11 years ago. As the required eleven years have now elapsed since the date of birth of the most recent born case, Scotland, as a zone of the UK, is in a position to apply for NR status.

• Objective

The policy objective is to ensure the supporting evidence and the implications this proposal will have for Scotland are fully explored in order that an informed decision can be made in relation to a BSE NR status application.

• Rationale for Government intervention

At the Standing Committee on Plant, Animals Food and Feed (ScoPAFF) on 17 March 2015, the European Commission agreed proposals to relax Specified Risk Material ( SRM) controls for Member States which have NR status. This brings EU rules more in line with the OIE requirements for non- EU countries. Scotland is now in a position to apply for BSE NR status and officials are assessing the benefits of an application with the aim of submitting a formal application to the OIE.

Consultation

• Within Government

Food Standards Scotland ( FSS) has been involved throughout the policy development to assess the implications of an application for BSE NR status. FSS has confirmed that it has no objection to any proposed application being made. If NR status is achieved it will need to be satisfied that all of the appropriate food safety controls are in place.

• Public Consultation

A formal consultation will take place on the BSE NR status application from 26 August to 30 September 2016.

• Business

Key stakeholders were consulted at a stakeholder engagement event in April 2016 to discuss the advantages and disadvantages and were fully supportive of a proposed application. Representatives included:

• Scottish Association of Meat Wholesalers ( SAMW)
• Scottish Federation of Meat Traders Association ( SFMTA)
• National Sheep Association ( NSA)
• Scottish Beef Association ( SBA)
• NFU Scotland
• Institute of Auctioneers and Appraisers in Scotland ( IAAS)

A formal written public consultation exercise is being held to gauge wider sectoral views on the impact of the proposed application.

Options

• Option 1 - do nothing
• Option 2 - wait until an overall UK application is made
• Option 3 - consider making an application to the OIE to have Scotland classified as BSE NR status

Option 1 - Do nothing

This option means that Scotland would continue to be classified as BSE Controlled Risk ( CR).

Option 2 - Wait until an overall United Kingdom application is made (not preferred)

This option means that Scotland would continue to be classified as BSE CR and form part of an overall UK application.

Option 3 - Consider making an application to the OIE to have Scotland classified as BSE NR status (preferred)

If Scotland was upgraded from CR to NR status, BSE testing and feed and food safety arrangements for cattle would not change, unless a risk assessment indicated that this was appropriate, and then only in accordance with Regulation ( EC) No. 999/2001. In the event of moving from CR to NR status, feed controls, surveillance etc. would continue to be carried out in accordance with the EU requirements. The necessary official controls, therefore, would remain in place to deal with any residual risks associated with occasional cases of BSE.

Sectors and groups affected

The following sectors are likely to be affected by the proposals:

• Scottish farmers
• Scottish meat producers
• Scottish abattoirs & cutting plants
• Animal By-Product ( ABP) renderers
• Meat Exporters
• Consumers

Benefits

Options 1 and 2 would see no change to current practices.

Under Option 3:

• Scotland would make a standalone application for BSE NR status which if accepted would be of benefit to Scottish industry and see a marked change in SRM disposal methods.

It is argued that Scotland's reputation as being a disease-free region would be enhanced should NR status be achieved and this would provide a much stronger basis from which to develop a customer base in parts of the world where consumer opinion is highly sensitive to BSE. In terms of the value of market opportunities, it is difficult to put an exact figure on what might be achievable if Scotland had full market access to all significant meat-importing countries around the world.

Costs

There will be a cost to the rendering sector through loss of throughput material as there will be less SRM to be disposed of. If there is a reduction in Category 1 rendering capacity, it may result in increased disposal costs to livestock producers and meat establishments due to reduced competition, and increased transport costs.

There would be resource costs to the Scottish Government, the Department of Environment, Food and Rural Affairs (Defra) and the Foreign and Commonwealth Office ( FCO) and non- EU countries to re-negotiate and agree export certificates. There is no direct cost to industry in making an application, however there could be cost implications should trade be disrupted where export conditions need to be re-negotiated.

The effect of achieving NR status on the domestic consumer is difficult to quantify. It can be argued that, on one hand, animals being slaughtered are of a higher health status compared to animals in CR status countries, however conversely it could be suggested that in NR status countries there is a reduction in controls over SRM. The responses to the consultation document will provide an insight into how this is viewed by the consumer and the retail trade, but at this stage, we cannot determine the costs or benefits to the domestic trade.

Scottish Firms Impact Test

This will be completed once the data from the consultation is collected and analysed.

Competition Assessment

There is risk that, with the reduction in the quantity of SRM for disposal, rendering capacity in Scotland may reduce. This could reduce in loss of competition for material for disposal and an increase in cost of future disposal, which would also affect the disposal of fallen stock. The Scottish Government would have concerns if capacity in the rendering industry was reduced, and especially in the context of an epizootic disease situation.

Test run of business forms

There will be no specific business forms involved with the implementation of the proposed legislation.

Legal Aid Impact Test

The proposal is unlikely to have an impact on the legal aid fund.

Enforcement, sanctions and monitoring

Countries that have been assessed as negligible risk or controlled risk must also:

• notify the OIE in writing during the month of November of each year that the epidemiological situation with respect to BSE has remained unchanged, and
• document their continued observance of OIE standards.

Failure to comply provides grounds for the OIE to revoke the given status.

Implementation and delivery plan

We will consider proposals for a Scottish application to the OIE for BSE NR status in light of the responses to this consultation. We are keen to hear views from as wide a variety of individuals and organisations as possible, in particular those involved or with an interest in the livestock, agricultural, food business operator, environmental and academic sectors.

Summary and recommendation

Option 3 is being recommended. This option allows Scotland to make an application to the OIE for BSE NR status. This option is of great economic, environmental and social benefit to both Scottish farming, food and rural industries as well as the Scottish Government.