Volume 6: Human Health, 1989-96
2. The slaughter and compensation scheme
Further changes in the slaughter and compensation scheme
Growing concerns about the cost of the compensation scheme
Presentation to the public
The Bovine Spongiform Encephalopathy Compensation Order 1994
Discussion
Conclusion

Growing concerns about the cost of the compensation scheme

2.207 During the 1990s, government Departments, including MAFF, were under increasing pressure from the Treasury to reduce their running costs. In the 1993 Public Expenditure Survey, MAFF was required to find savings of 2½-5 per cent in its domestic agriculture expenditure. ¹ MAFF estimated that its expenditure on BSE compensation under the slaughter and compensation scheme would rise in the 1994/95 financial year by £18.7 million. ² Mr Portillo, Chief Secretary to the Treasury, pressed Mr Gummer to come up with options for cuts, in consultation with the other Agriculture Ministers. ³ MAFF reached the view that some changes were required in the BSE scheme in order to limit costs.

2.208 One idea suggested by Sir Hector Monro, Parliamentary Under-Secretary at the Scottish Office, was to freeze the average market price for a year. However, this was not guaranteed to generate savings, and could potentially be more expensive, as economists had indicated that the price of cattle was likely to fall rather than rise over the period. ⁴

2.209 The Treasury suggested that the compensation rate could be cut from 100 per cent to 90 per cent. However, MAFF officials were concerned about the presentational impact of such a reduction. In a minute to Mr Packer and other MAFF colleagues, enclosing a draft submission to Mrs Gillian Shephard the new MAFF Minister, Mr Thomas Eddy ⁵ commented on the Treasury's proposal:

The trouble with this option is not so much the reaction from farmers who might have some difficulty arguing that 90% of the value of a terminally ill animal was an unreasonable level of compensation (it would certainly be more generous than that for TB) but from Professor Lacey and the media. Anything which suggested that we were not paying farmers the full price for their animals would be used to condemn the Ministry for reneging on its responsibilities to protect the consumer in order to save money and claim that farmers would be out of pocket unless they hid BSE cases and send them off for slaughter. The expected decline in cases would simply be used to confirm that this was indeed happening. In presentational terms we would be into a damage limitation exercise in an area where there is high media interest and a strong propensity to think the worst. ⁶

2.210 Mr Eddy went on to suggest amending the way the value of an animal was calculated:

. . . although we currently pay whichever is the less of the average market price or the actual valuation of the animal, the market price calculation is based only on the value of animals in calf or in milk and takes no account of the lower prices paid for cows at the end of their milking life 'barrener cows'. If our epidemiologists are right, an increasing proportion of BSE suspects in future years will be amongst these older cows and it is therefore not unreasonable to reflect this in the prices paid.

. . . there are really two types of approach. A sophisticated one, based on separate prices for the 2 categories of cow, which looks good on paper but is difficult to apply in practice and a simpler one, based on a single lower price, which would serve out rough justice to those with young cows but would be easy to apply on the ground. ⁷

2.211 On 9 September 1993, Mr Packer forwarded Mr Eddy's submission to Mrs Shephard informing her of the options for savings on BSE expenditure in the 1993 public expenditure survey (PES) bid. In his covering minute, Mr Packer said:

The proposal which it is suggested we pursue, namely including within our compensation arrangements an element to account for the number of barren cows slaughtered, seems a sensible one which could generate useful savings. For the reasons given, the alternatives of separately identifying and compensating for barren cows, and Sir Hector Munro's suggestion put forward at the bilateral with the Chief Secretary both seem unattractive.

I have instructed the Division to proceed urgently with the further work with Economics and Finance Groups. I suggest that there is no need for you to write to the Chief Secretary at this stage.

Unless you see matters differently, therefore, the attached papers are put forward for information at this stage. We can consider later when to float the idea with the Treasury. ⁸

2.212 In her statement to the Inquiry, Mrs Gillian Shephard explained her response to the proposal:

Mr Packer commented that he believed the proposal it was suggested we pursue, namely adjusting the compensation arrangements to take account of the number of barren cows slaughtered, seemed a sensible one which could generate useful savings. I was concerned that the compensation arrangements had become over generous in that barren cows, which did not fetch a high price at market, should have been included in the average price and were not. As the feed ban was reducing the number of new cases of BSE in cattle born after the ban, the proportion of barren cows (which were generally older cows) in the total number of BSE cases was increasing. I thought the compensation arrangements should be changed but was concerned that there should be no disincentive to declare suspect BSE cases. Further consideration was given to the matter. ⁹

2.213 A further submission reflecting the choice of the 'barrener cow' approach, was put forward to the Minister on 16 November 1993 under cover of a minute from Mr Packer. It recommended that the change to the compensation arrangements should be introduced on 1 April 1994. It would affect the way the average market price would be calculated. The price would be calculated from 36 markets in England and Wales and would include heifers in milk and calf, Friesian/Holstein cows, and barreners. The calculation would reflect proportionally both cows aged 7 years and over and younger cattle on the basis of BSE suspects slaughtered. ¹⁰ The Minister agreed to the recommendation in principle. ¹¹

2.214 The covering minute from Mr Packer warned that there would be unsubstantiated claims made that the changes would encourage farmers to dispose of animals into the human food chain. ¹² In the submission, however, Mr Eddy noted that the average market price would still be above the cull cow price, so that there would not be an incentive for farmers to hide BSE carcasses and sell them off for meat. ¹³

2.215 On 17 January 1994, Mr Eddy put forward a submission to Mr Nicholas Soames, the Parliamentary Secretary responsible for food safety issues, seeking his agreement to the arrangements for the announcement of the proposed changes to the compensation provisions. ¹⁴ This was given and the proposed changes to the compensation arrangements were announced on 21 January 1994 in a written Parliamentary Answer. ¹⁵

Presentation to the public

2.216 On the same day, MAFF issued a press release which said that the reason for the change was to:

reflect the older age range of cows currently being slaughtered as BSE suspects which have little value for further breeding. ¹⁶

2.217 It quoted the written answer which had concluded:

The new method of calculation would still result in a compensation price higher than the price the farmer would get for a dairy cow sold for meat so that farmers would not be discouraged from reporting all suspect BSE cases. ¹⁷

2.218 As a part of the proposed change to the Compensation Order, MAFF undertook a consultation exercise. On 21 January 1994, a letter was sent out to interested parties in England, including farmers' organisations, veterinarians, meat industry bodies, local authorities, renderers, livestock auctioneers and marketing boards. ¹⁸ It explained:

The purpose of this change would be to reflect more realistic prices for BSE suspect cattle in the knowledge that an increasing proportion of cows being slaughtered as BSE suspects are older cows with little value for further breeding. ¹⁹

2.219 The letter also stated that:

The new method of calculation would still result in a compensation price higher than the price which the farmer would get for a dairy cow sold for meat, the 'barrener price', because it would be an average of that price and the higher price paid for milking cows. ²⁰

2.220 The responses received by MAFF to the consultation exercise were summarised briefly in Mr Eddy's submission of 22 February 1994 to Mrs Shephard. ²¹ This indicated that responses to the consultation letter reflected 'muted criticism of the proposals' as farmers never welcomed cuts in compensation. MAFF had considered the ideas put forward by the farming unions and the auctioneers, but recommended that the proposals, as announced on 21 January, should be implemented as soon as possible.

2.221 DANI officials suggested to Baroness Denton, the Parliamentary Under-Secretary of State for Northern Ireland, that they should consult with interested parties on the basis that the proposed changes would not come into effect in Northern Ireland until 1 September 1994. Although there was clear evidence of an improvement in the BSE position in Great Britain, it was less marked in Northern Ireland and therefore a reduction in compensation levels was likely to be less popular with industry. ²² Baroness Denton agreed to this proposed basis for the consultation with interested parties. ²³

The Bovine Spongiform Encephalopathy Compensation Order 1994

2.222 The Bovine Spongiform Encephalopathy Compensation Order 1994 came into force in Great Britain on 1 April 1994. ²⁴ MAFF estimated that, as a result of these changes, there would be a reduction in the amount of BSE compensation paid in 1994/95 from an estimated £31.0 million to £26.3 million. ²⁵

2.223 Compensation was calculated in line with the proposal discussed above (see paragraph 2.212-2.213). The compensation payable was either the market value of the animal or the indicative market price, whichever was the lower. The indicative market price was determined by calculating a weighted average of prices for cows in milk and barrener cows, as set out in Annex 1 to this chapter. These prices were based on the statistics for the month occurring two months previous to the month in which the indicative market price would apply. ²⁶ Animal Health Circular 94/23 was issued by MAFF to VOs informing them of the changes to the calculation of the payment. ²⁷

2.224 In Northern Ireland similar regulations implementing this change to the method of calculation came into force in August 1995 in the form of the Diseases of Animals (Modification No. 2) Order (Northern Ireland) 1995. ²⁸

Discussion

Was the initial level of compensation adequate?

2.225 This question can be considered from two viewpoints:

1. Was the level of compensation fair?
2. Was the level of compensation adequate to ensure compliance with the duty of notification?

Fair compensation

2.226 Section 32(3) of the Animal Health Act 1981 provided that compensation should be paid on a scale to be determined by the Minister with the Treasury's approval. It seems to us at least arguable, giving compensation its natural meaning, that the statute intended that those deprived of their cattle by an Order of compulsory slaughter should receive financial compensation that bore a reasonable relationship to their loss. The loss in question was not, however, the loss consequent upon having a cow affected, or suspected of being affected with BSE. The loss was that experienced as a result of the deprivation of such a cow.

2.227 Viewed in this light it seems to us that the level of compensation initially provided for by the Order was fair. An animal showing symptoms of BSE was arguably worthless. At best its value was that of a cull cow. Payment of 50 per cent of the market value of a healthy cow could not be said to be unreasonable. For a cow suspected of having BSE, but which did not have the disease, 100 per cent of the market value was paid provided this did not exceed the limits set out in the Order. This does not seem unreasonable. The fact that some farmers took insurance out against the compulsory slaughter does not demonstrate the level of compensation was inadequate. In effect the risk they were insuring against was that of the loss of value of the cow consequent upon it contracting BSE.

2.228 When an owner declared to MAFF that an animal was suspected of having BSE, but the animal died or was put down before a MAFF veterinarian confirmed that it appeared to have the disease, no compensation fell to be paid under the Order. On the recommendation of Mr K Taylor and Mr Meldrum, it was agreed that normal compensation would be paid on an ex gratia basis in those circumstances, provided that the animal was shown to have been suffering from BSE. When the animal did not have BSE, £50 was paid. This arrangement seems to us fair and we commend it.

Compensation adequate to ensure compliance with the duty of notification

2.229 Whether the compensation was adequate to ensure compliance with the duty of notification is, perhaps, a pragmatic test of whether it was fair. If farmers could obtain a significantly better return by sending a suspect cow to slaughter rather than notifying its condition and receiving compensation, this would suggest that the compensation was not fair.

2.230 In a paper prepared by Mr Lowson in July 1989, he observed:

At the practical level, the operation of a compulsory slaughter policy relies in large part on the cooperation of producers. Farmers need an incentive to notify disease outbreaks. The lower the rate of compensation, the greater will be the incentive on an unscrupulous farmer to dispose of a suspect animal without reporting it; and, probably more important, the greater would be the incentive on any normally cautious farmer to wait and see if symptoms developed further before doing so. Although it is inherently difficult to prove, this factor lies behind the widespread belief within the industry that farmers are failing to report suspected cases of BSE because the rate of compensation is too low. The threat of prosecution will often not be an effective incentive because of the difficulty of mounting a satisfactory case. ²⁹

2.231 What evidence was there to support the 'widespread belief' that farmers were evading the obligation to give notification of cattle suspected of being affected with BSE?

Evidence of failure to notify

2.232 Witnesses to the Inquiry from different sectors gave little support to the suggestion that there was widespread evasion of the notification requirement.

2.233 Leaders within the farming industry expressed firm belief that non-reporting of suspect cattle did not occur or did not occur to anything more than a negligible extent. ³⁰ Farmers who gave evidence to the Inquiry generally confirmed this:

In my view [under-reporting of the disease] did not occur because these animals were on a one-way track towards death. That was so inevitable that one was glad to interrupt that process and get her humanely destroyed before she actually died. So I do not believe that [compensation set at 50 per cent] led in any way to under-reporting of BSE. ³¹

2.234 Veterinarians also said that they believed that under-reporting was unlikely. Mr Roger Eddy, a veterinary surgeon, said he had never experienced under-reporting of BSE suspects, labelling the coverage of this issue as 'pure press speculation'. Even prior to the increase in compensation, he believed that the reporting was 'virtually 100 per cent'. ³² The evidence of other veterinary surgeons also suggested that, in general, farmers were diligent and honest in meeting their responsibilities:

[Evasion of the scheme] was a conversation that cropped up very, very frequently amongst my farming clients. I am not the best lie detector on earth, but I would be very surprised if any of them had tried to bypass that 50 per cent. They grumbled about the 50 per cent, but I do not think it resulted in any cows going into the human food chain that should not have done. ³³

. . . I am absolutely convinced that it did not happen in our area. We were promoting this new disease. We wanted to know about it. We did not know what we know now, of course, of the potential disasters that it was going to cause. Most of my clients, I am sure, were keen to let us know when they had one. I finished up with virtually every herd of mine with dairy cows which had a case, at least one case. I am certain it did not happen in our particular area. ³⁴

But I am pretty sure that in those days farmers were just keen to get them identified and off the farm. I do not think the issue of compensation actually influenced them at that time. ³⁵

2.235 Few witnesses could provide firsthand knowledge of evasion:

Certainly there was a lot of anecdotal evidence to suggest on the grapevine, if you like. I know of no actual cases. I certainly have no personal knowledge of cases. In our area, certainly there was a lot of anecdotal evidence that this was happening. ³⁶

2.236 The recurrent theme was that any non-notification occurred in quite limited instances:

I do believe that in general most farmers were responsible about reporting what they saw as prospective BSE cases and I do not think most farmers would be moved to knowingly or willingly not report. However, in any barrel you will get rotten apples, plus there was a sort of social stigma. There was a great deal of fear about having a case of BSE and so for some people I think that could have inhibited them and if they thought there was a way of just disposing of this animal there could be a temptation. ³⁷

2.237 The identification of BSE suspects at markets and slaughterhouses did not demonstrate that these animals had been sent to market by their owners in the knowledge that they might be suffering from BSE. The NFU explained this in a press release dated 4 January 1990:

There is no evidence that farmers are deliberately selling BSE-infected animals through markets. We have recommended that the Government should remove any apparent temptation to do so by compensating farmers at full market value for slaughtered animals. However, it is not always possible to identify infected animals on the farm. The disease has an incubation period of up to six years. The stress of loading, transporting and unloading an unsuspected infected animal is sometimes enough to bring on easily detectable signs of the disease in an animal in which it was previously not detectable. ³⁸

2.238 If the 50 per cent level of compensation had been leading to evasion of the notification requirement, we would have expected a surge in the number of cases notified when the compensation was increased to 100 per cent. The House of Commons Select Committee on Agriculture considered this possibility in the report it published in 1990. While considering 'it might have been prudent, for reasons of public reassurance', to have introduced full compensation earlier, it found that full compensation 'produced no very dramatic increase in the number of cases being reported'. ³⁹

2.239 This finding was largely based on the evidence given to the Committee by the Meat and Livestock Commission and the NFU. Sir Simon Gourlay, the President of the NFU, and the Chairman of the MLC, Mr Geoffrey John, ⁴⁰ both confirmed to the Committee that they were convinced that there was 'no change in the farmers' reaction as a result of the increase to 100 per cent'. ⁴¹ In support of its assertion, the MLC supplied the Agriculture Committee with weekly numbers of the suspect cases reported before and after the increase in compensation. They contended that these figures showed that, following the increase on 14 February 1990, the 'apparent rise in reporting of suspects was not real':

It was part of a general rise which started in late January and the apparent increase fell back again progressively from 9 March. Reference back to the earlier stages of the outbreak in 1988 shows that a similar blip occurred between August and December when the cases reported monthly rose from 190 in May to 330 in September and back to 190 in December. We believe that such variations are a normal part of the pattern of the disease and in no way imply any change in practice by farmers when compensation was increased. ⁴²

2.240 Mr Meldrum agreed with this conclusion:

Comment has been made about the effect of increasing the compensation in February 1990 . . . Of course the increase would not occur until six or eight weeks later because of the delay in confirming diseased cases. But nevertheless, there does appear to be a pattern year upon year upon year. I could not see in here nor could the experts at Weybridge see any evidence of a significant increase. That was of course reassuring at the time, indicating that our steps were working to remove suspect cases either from farms or from markets, or from the slaughterhouse if they got that far. ⁴³

2.241 Mr John Wilesmith, the Head of the Epidemiology Department, ⁴⁴ initially considered that the increase in the level of compensation had an impact upon the number of suspect BSE cases being reported weekly. In a paper submitted to SEAC he noted that 50 to 60 additional cases per week had been subjected to Form A restrictions. ⁴⁵ However, he told us that with the benefit of hindsight he was less convinced that the rise in reported suspects could be solely attributed to the increase in compensation:

I think it is a very difficult thing once you have the full series of data, to determine whether or not there has been some change . . . So one is not quite sure whether it is the compensation being paid or that we actually have a better knowledge of the disease and its clinical appearance by herdsmen and herd owners. ⁴⁶

2.242 We would commend Mr Meldrum for his initiative in pressing for ante-mortem inspection at slaughterhouses. This must have acted as a disincentive to any farmer tempted to attempt to pass off an animal showing symptoms of BSE as a healthy animal. These inspections became the responsibility of the Local Veterinary Inspectors (LVIs) at about the time that compensation increased to 100 per cent.

2.243 The results of the ante-mortem inspection programme introduced at domestic slaughterhouses suggest that if there was non-reporting it was not widespread. By the end of December 1990, 3,323 visits had been made to 743 slaughterhouses and a total of 31,256 animals had been inspected. Of these, 29 suspected BSE cases were identified. Fourteen of the suspect cases were confirmed as infected with BSE. ⁴⁷ During the same period, meat inspectors and slaughterhouse staff reported another 60 suspects in domestic slaughterhouses, 34 of which were positive. ⁴⁸

2.244 This trend continued. In January, February and March 1991, 909 visits to domestic slaughterhouses were made by veterinarians under the ante-mortem inspection scheme and 9,615 animals were inspected. Only 12 suspect cases were identified and 6 of these were subsequently confirmed at the laboratory to have BSE. During the same period, a total of 32 suspect cases were identified at domestic slaughterhouses by meat inspectors and slaughterhouse mangers and owners. Of the 32 suspected animals, 18 were subsequently confirmed as having BSE. ⁴⁹

Conclusion

2.245 A farmer who succeeded in passing off at the slaughterhouse a cow with symptoms of BSE as a healthy animal would have, on occasion, profited financially by doing so rather than accepting 50 per cent of the value of a healthy animal as compensation. The evidence strongly indicates, however, that this was not a common occurrence.

2.246 Our conclusion is that the formula for calculating compensation was fair. If one considers the financial position of farmers by reference only to the individual animal that was sick, it provided adequate incentive for farmers to comply with the notification requirement. We have no criticism of those who resisted paying more. In fixing the level of compensation MAFF officials and Ministers had very properly had regard to the interests of the taxpayer.

2.247 Mr Gummer's decision to raise the level of compensation was motivated in part by a desire to have extra reassurance and in part by a recognition that some farmers with multiple cases of BSE were suffering financial hardship. We consider that these reasons justified his decision. Mr Gummer's decision to raise the level of compensation was motivated in part by a desire to have extra reassurance and in part by a recognition that some farmers with multiple cases of BSE were suffering financial hardship. We consider these reasons justified his decision. Equally, we have no criticism to make of the downward adjustment in the level of compensation that was made in 1994. The adjustment was made to reflect the fact that a large proportion of the cows developing BSE were at the end of their working life, and was motivated by a desire to save money. We consider this adjustment to have been reasonable in the circumstances.

Preserving BSE-free status

2.248 There was another reason why a farmer might not wish to give notification in relation to an animal suspected of showing symptoms of BSE, which was not related to the level of compensation. In June 1988, Northern Ireland stopped accepting, for breeding and production purposes, ⁵⁰ animals from Great Britain that had 'moved through any herd subject at any time to BSE problems'. Later that summer Dutch veterinary authorities sought and obtained an assurance that Great Britain would only export calves born in herds where no cases of BSE had been confirmed. ⁵¹ By July 1989, MAFF had 'agreed bilateral arrangements with Germany, the Netherlands, Denmark and Ireland which precluded exports of cattle from herds where BSE had occurred'. ⁵² The Inquiry also heard evidence that major supermarkets, such as Safeway, also endeavoured to source their beef purchases from BSE-free herds. ⁵³

2.249 In June 1990, in its evidence to the House of Commons Select Agriculture Committee, the MLC acknowledged that if a 'significant price differential' did emerge between beef from BSE-free herds and beef from other herds, there would inevitably be a temptation for some farmers to avoid the system of notification. ⁵⁴ However, well before this time there were reports, albeit unconfirmed, of both a 'price differential' and of farmers responding by evading the scheme in order to protect the status of their herd.

2.250 On 12 October 1988, Mr K Taylor received a minute from Mr A T Turnbull, DVO in Bristol, regarding the export of calves to the Netherlands. Mr Turnbull reported that he had been approached by a representative of the NFU who 'already' had evidence that BSE was no longer being reported and that suspects were 'being slaughtered or buried on farm'. This was said to be due to the differential in the price of calves in the Devon markets: 'between £30 and £100' depending on whether they were accompanied by a declaration as to their BSE-free herd status. Mr Turnbull also stated that there was evidence that calves from BSE premises were being ear-tagged with tags from neighbouring farms and sold as coming from the neighbour's property. Mr K Taylor forwarded this correspondence to MAFF officials, including Mr Meldrum, adding that the 'evidence' it referred to constituted 'hearsay'. ⁵⁵

2.251 We had evidence which indicated that some farmers made a business of purchasing BSE suspects at cut price in order to treat them as their own and claim compensation. The clear inference was that those who sold to them in such circumstances were doing so in order to preserve the reputation of having BSE-free herds. The object of practices such as these was not to sell the cattle in question for human consumption, but to cover up their origin when they were notified to the Government for slaughter. In such circumstances breach of the Regulations in relation to ear-tagging and record-keeping must have taken place. It follows that practices such as these did not result in BSE suspects entering the human food chain.

2.252 Nor did the alternative practice of on-farm burial of suspect BSE cattle that farmers had not notified to the State Veterinary Service result in BSE suspects entering the human food chain. The result may have been that other cattle from the seller's herd could continue to be marketed to customers who believed they were purchasing meat from BSE-free herds. This would probably be a fraud on the customer if it were done deliberately. But did it entail a health risk to consumers? The epidemiology did not suggest that any significance attached to whether or not a cow came from a BSE-free herd. We conclude that it was reasonable at the time to think that purchasing meat from BSE-free herds offered no significant protection to consumers additional to that provided by the Specified Bovine Offal ban.

2.253 Therefore, while the BSE-free status of a herd gave farmers and producers of food a useful marketing tool and thus a competitive business advantage, it was reasonable to think that misrepresentations of BSE-free status did not pose a significant danger to human health. We do not condone them, and nor did MAFF, but they were not frauds which any increase in compensation could prevent.

2.254 After June 1990, BSE-free herd status became more important as a result of Commission Decision EC90/261. ⁵⁶ This required that bone-in beef for export to EU countries carried certification that it came from herds free of BSE in the previous two years. A minute prepared in June 1990 by Mr Lowson highlighted potential difficulties that the certification requirement could cause:

The owners of the 7,500 herds in which BSE has been confirmed may find themselves at a disadvantage. None of the meat can be exported in carcass form to the [European] Community and will only be available (in this form) for home consumption. This may put a stigma on them as being 'at greater risk' . . .

One worry we do have - depending on how the market develops - is non-reporting if herds with cases are put at an economic disadvantage. The number of suspect cases reported will be a good indicator as to whether or not this is happening; if it does become clear from the figures the opposition will of course exploit it although the offals ban provides the necessary public health protection. ⁵⁷

2.255 Speculation that farmers were evading the scheme began within weeks of the introduction of the requirement. A minute from Dr Matthews dated 22 June 1990 noted that there are 'already rumours of farmers arranging for their stock to be taken to market by neighbours, supposedly as their property, and therefore certified as coming from herds free of BSE'. ⁵⁸

2.256 Evidence indicated that to preserve their BSE-free status farmers sold their BSE suspects to other farmers or dealers for less than the compensation the latter would receive. Dr Stephen Dealler, a consultant microbiologist at the Burnley General Hospital, told the Inquiry about one farmer who he had heard engaged in this practice. ⁵⁹

2.257 Mr Brian Etheridge of the Association of District Councils explained to the Inquiry that:

The suggestion made to us by local authorities at the time was that the compensation and the stigma which may be attached to declaring a BSE infected herd may have led farmers to seek other disposal routes. ⁶⁰

2.258 The suggestion that BSE suspects were buried to avoid notification was not considered 'credible' by Mr Ben Gill of the NFU. He stated that the NFU had not heard of this practice occurring in England or Wales. ⁶¹ However, farmers who had made false declarations about their herd's BSE-free status were successfully prosecuted in both Devon and Scotland. ⁶²

2.259 From July 1994, EC Decision 94/474 extended the requirement so that bone-in beef had to be certified as coming from a provenance which had been free of BSE for the previous six years. ⁶³

2.260 Any farmers who evaded the slaughter and compensation scheme in order to preserve the BSE-free status of their herd were driven by different considerations as opposed to farmers who avoided notification in order to obtain the full market value of a BSE suspect. This was reflected in the different practices they employed. The burial of BSE suspects and the selling or transferring of them to other premises were means of evading the scheme that would not have been contemplated by an owner intent on full compensation. However, for farmers intent on preserving the BSE-free status of their herd, obtaining full market value for suspects was a minor consideration. Mr Young of the British Veterinary Association told the Inquiry of the priority for such owners:

I think actually that if he was only trying to protect the status of this herd and reputation of his herd, whether in fact compensation was paid was neither here nor there. He was not looking for value of a single animal, he would have been trying to protect the value of his entire herd. I do not think any compensation level would have got over that problem. ⁶⁴

2.261 The relative unimportance of receiving compensation for the animal meant that such farmers were less likely to attempt to 'slip' a BSE suspect through a slaughterhouse. Successfully disposing of an animal in this way required that it go undetected at the slaughterhouse, an increasingly unlikely prospect as veterinary ante-mortem inspection and general awareness of the disease became more widespread. The alternative methods of evasion to preserve BSE-freedom - on-farm trial or transfer to other premises - offered more realistic prospects of success. Significantly, these methods did not raise the same human health concerns. A BSE suspect buried on a farm did not reach a slaughterhouse or a butcher's shop window. A suspect animal transferred to, and notified by, a neighbouring farm was still being notified to the Ministry and upon diagnosis would be destroyed in accordance with the scheme. Nonetheless, these practices did subvert the purpose of the certification scheme with the result that cattle from what purported to be BSE-free herds sometimes came from farms that had successfully hidden their BSE cases. Such practices also distorted epidemiological results, making it difficult to identify the source of the disease.

Unanticipated burdens on the Veterinary Investigation Service

2.262 Finally, we would like to record our commendation of the Veterinary Investigation Service for the efficiency with which it undertook the task of diagnosing whether or not suspects were infected with BSE. When the slaughter and compensation scheme was introduced it was anticipated that it would apply to about 60 cattle a month. At the height of the epidemic that figure reached 8,000 cases. This placed an enoromus and unanticipated burden upon the VIS.