Bovine tuberculosis compensation arrangements: consultation

Part 3 - Proposals for Consultation

1. Reduced or Non-payment of Compensation for Illegal Moves onto Restricted Herds

We understand that for a number of reasons there is sometimes a need for cattle to be moved onto a restricted farm. In these situations APHA may provide the keeper with a licence allowing them to bring animals into the herd.

However, herds which are under TB movement restrictions must not be restocked until all cattle over six weeks of age have had at least one clear TB test. This is because the true extent of the disease outbreak will not be known until the completion of the first short interval test and so the risk for incoming cattle cannot be fully assessed until the test results are available.

Any licence requests approved by APHA are subject to veterinary risk assessment and won't be provided until the first short interval TB test has been completed.

The Scottish Ministers currently pay compensation at full market value to the owner of any animal we slaughter because of TB and this currently includes those animals that have moved on to a restricted herd and that go on to become TB reactors. The Tuberculosis (Scotland) Order 2007 as it stands does not allow for compensation to be reduced or withheld where the owner/keeper has acted both irresponsibly and illegally and moved cattle onto an infected premises without a licence permitting him to do so.

The Scottish Government intend therefore to amend the provisions of the Tuberculosis (Scotland) Order 2007 to provide the Scottish Ministers with the powers needed to either reduce or withhold compensation completely for those owners who have broken the rules in this way. An appeals mechanism to allow the decision to be reviewed where the owner feels there are valid reasons for doing so will also be introduced.

2. Reduced Compensation for Overdue Testing

Active surveillance for bovine TB is achieved through a routine herd testing programme and this is carried out using agreed testing protocols and frequencies.

In January 2012 the Scottish Government introduced a risk based TB testing policy in Scotland whereby "low risk" herds became exempt from the default routine herd testing interval of 48 months. So with 57% of the national herd now exempt from testing it is more important than ever that the required testing of the remaining herds is completed within the allotted time period advised by APHA to avoid the unnecessary spread of any undisclosed infection.

The Scottish Ministers currently pay compensation at full market value to the keeper of any animals which are disclosed as TB reactors during routine herd testing and this includes animals from herds where testing is overdue.

Ensuring compliance with testing requirements is essential for the success of our TB surveillance programme and it again seems fair and reasonable that where a keeper has failed to meet the statutory testing obligations allowing disease to spread undetected within the herd, they should not then be able to recover the full market value for any of these animals that are subsequently disclosed as reactors.

We intend therefore to amend the provisions of the Tuberculosis (Scotland) Order 2007 to provide the Scottish Ministers with the powers needed to either reduce or withhold compensation completely for those keepers who have broken the rules in this way. It is anticipated that this will be on a sliding scale, i.e. the longer the delay in testing, the bigger the reduction in compensation. An appeals mechanism to allow the decision to be reviewed where the keeper feels there are valid reasons for doing do so will also be introduced.

3. Proposed change to Post Movement Testing Rules

Post movement testing rules in Scotland currently require that when a bovine animal is moved from a high incidence TB area to premises in Scotland, that animal must be post movement tested. The post movement test must be carried out between 60-120 days of arriving on Scottish premises.

Apart from the required 13 day standstill period these animals are under no restriction and can be moved off to another Scottish holding before the post movement test is done. In such circumstances the new owner is required to carry out the post movement test within the original 60-120 day testing window. It is only the original cross border movement that triggers a post movement testing letter from APHA, and so the purchaser is reliant on the seller to notify them about the requirement for this test.

We are aware that this flexibility provides an opportunity for high risk cattle to be moved to Scotland for a short period of time before being sold on either privately or at a market without being post movement tested. If the seller then either inadvertently or deliberately fails to notify the purchaser that an animal needs tested, we potentially have an untested animal from a high risk area circulating in a low risk herd for an undetermined period.

In April 2016 Defra introduced a requirement for post movement testing in the English low risk area, which is also required within a 60-120 day testing window. This test must be completed before the animal can move from the original destination holding, unless the animal meets any of the specified exemption criteria. This means that this "short cut" is now only possible in Scotland.

In order to maintain our current low levels of TB and to safeguard our OTF status Scottish Ministers propose to tighten up this provision to ensure it is both clear and enforceable.

The proposed options to address this issue, on which we are seeking the views of stakeholders, are;

• To introduce a statutory obligation on the seller to inform both the purchaser and APHA where the post movement test has not been done prior to the sale and on the purchaser to complete the test within the original 60-120 day testing window, or
• To amend the existing provisions of Article 9 of the TB Order to require that the post movement test is completed on the original destination holding with negative results before the animal is permitted to move again, unless going for slaughter.

4. Introduction of a Cap on Compensation Levels for Individual Animals

In Scotland we currently pay compensation at full market value to the keeper of any animals which are disclosed as TB reactors with no fixed upper limit. This is not the case in other areas of GB where valuation and compensation arrangements differ significantly.

In Wales, as well as the provision to reduce compensation for non-compliance, there is also a statutory cap on compensation for individual animals set at £15,000. The Welsh Government has just announced that this cap will be reduced to £5,000 from 1 October 2017.

In England reactor cattle values are determined by published compensation table valuations which are calculated each month from actual sale price data and relevant compensation amounts can be reduced where TB testing is overdue. Defra are also in the process of consulting on the proposal to extend provisions for reduced compensation and on the introduction of a £5,000 cap for individual animals which would make their policy consistent with that in Wales in this respect.

In order to protect our OTF status, we would want to ensure that compensation values in Scotland are relatively consistent with those in the rest of the UK and not seen by some as a more favourable option in terms of moving high risk cattle to Scotland or as an alternative to responsible sourcing. We are therefore considering the introduction of a £5,000 cap to ensure consistency with the rest of GB.

As a result of the low and stable incidence of TB found in Scottish herds, the figures set out in the table below, show that there have been relatively few high value TB reactor cattle in recent years, compared to England and Wales. Accordingly, the impact on Scottish cattle keepers from implementing such a cap is likely to be minimal.

Year	NumberAnimalsCulled	Total Compensation Paid (£)	Average compensation paid per animal (£)	Number of Cattle Valued over £5k	Compensation Saved from animals valued over £5k
2014	221	635,642	2,876.21	8	23,050
2015	128	248,471	1,941.00	8	46,600
2016	150	331,498	2,209.00	5	19,000
2014-16	499	1,215,611	2,436.00	21 (4%)	69,669

However, it is important to ensure in the current economic climate that the compensation system in Scotland is financially sustainable, fair to both the taxpayer and the farmer and safeguarded from the potentially significant compensation costs associated with high value animals. The owners of high value animals would therefore be encouraged to explore insurance options to cover any value which is in excess of £5,000 if this cap is introduced.

5. Automatic Valuation Justification ( AVS)

AVS is not something that we currently implement in Scotland, but it is applied elsewhere in GB. Wales, for example, has a £3,000 threshold above which valuers have to justify their valuations for pedigree cattle, thereby allowing greater numbers of higher valuations to be scrutinised.

Current policy in Scotland is for APHA to undertake administrative checks where unexpectedly high valuations are received, and if it appears that valuations are out of line with market prices those valuations are referred to Scottish Government and followed up by APHA.

As shown in the table at section 4 above, figures for Scotland show there have been low numbers of high value TB reactor cattle in recent years, compared to England and Wales and so excessive valuations are not known to be an issue, with current arrangements appearing to work well.

Scottish Government would therefore seek views on whether this is something that should be introduced in Scotland allowing us to scrutinise valuations more rigorously than we currently do.