open i

As it becomes increasingly apparent that the major challenge with the foot and mouth controls is tracing animals through, or more strictly around, livestock auction markets, a suggestion by Lord Haskins to reduce the role played by these most hallowed of agricultural institution takes on great currency. (630 words).

Lord Haskins, chairman of Northern Foods and someone who reputedly has the ear of the Prime Minister on farm issues, writing in the Guardian called "For a radical review of agricultural markets and practices." For the markets part he suggested "all livestock should move direct from farm to slaughterhouse without passing through disease-spreading markets."

Farmers have several reasons to be concerned when Lord Haskins makes such an unequivocal statement.

They would be right to express concern and question such a suggestion simply because it comes from the chief executive of a major food processor.

While Haskins may seem naive in suggesting that livestock auction markets can some how be simply eliminated, much else he wrote made a lot of sense. The danger is that it is too easy to agree with all he wrote because most of the rest makes sense.

And Haskins as an advisor to the Labour government probably needs to be taken more seriously than an academic with limited practical experience or an industrialist with a vested interest. The government must be looking for answers and may be tempted to grab at any half reasonable suggestions.

But most importantly there is a grain of truth in what Haskins suggests. Even the most ardent supporter of auction markets would probably agree to this. The challenge has always been not in identifying their shortcomings but finding alternatives that provide the benefits but avoid the deficiencies. On this Haskins was silent.

The needs of an effective marketplace are seductively simple, lots of buyers and sellers, good information and system integrity, but difficult to put in place for livestock without the traditional sales ring.

Livestock dealers and other traders may or may not be born with the herd instinct but they are generally happier dealing on an auction market where they have some assurance that they are not paying much more than the competition, with due allowance for their judgement of quality. Importantly at an auction market they know they will get paid promptly when they are selling, and they take home what they bought in the ring.

Private treaty sales certainly work where trust exists, buyers or sellers are limited in number and, of course, there is some convenient livestock market price to use, explicitly or implicitly, as a benchmark.

Modern electronic communication can certainly help, whether checking the other options with a mobile phone when dealing on a bunch of sheep on a hillside, bidding on a video lot in an auction market, or using internet listing services.

It is, however, a very confident, or even foolhardy, buyer or seller who does not steal an occasional glance at the old-fashioned auction markets.

The Haskins suggestion, in fact, got tested sooner than might have been expected. With direct abattoir movements licensed but livestock markets remaining closed last week, direct sales had the floor to themselves.

It was very timely, but not terribly convincing or confidence boosting. Some abattoirs, faced with reduced supplies and a marketplace that had lived off inventories for a week, have been reported to have lowered beef prices over 20p per kilo while others held steady.

The abattoirs’ case that their costs had risen as a result of the foot and mouth and they were simply recapturing these costs may have been well rehearsed. But it was not terribly convincing where supply and demand were supposed to rule.

It was just the sort of occasion when auction market reports would have come in handy.

March 13 2001