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Rendering Industry: Support Arrangements

Volume 576: debated on Sunday 18 February 1996

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asked Her Majesty's Government:When they will decide on the final arrangements for financial support for the rendering industry in 1996-97.

My right honourable friend the Minister of Agriculture, Fisheries and Food announced in April that the Government would be providing temporary financial support to the rendering industry of up to £118 million this financial year. Since then we have made payments of about £59 million on account pending final decisions on the form of this support. We have met our objective of ensuring through this support that the essential links in the meat supply chain are maintained.

My right honourable friend has now announced that the Government have finalised support arrangements for 1996-97. These take the form of a non-statutory scheme, and follow detailed consultation with representatives of the rendering industry. Copies of the scheme and the agreement which companies receiving support will have to sign are being placed in the Library of the House.

As with the payments on account, support will be based on renderers' loss of income by comparison with 1995-96. However, support will be adjusted to take broad account of renderers' actual levels of throughput and costs this year. We have ensured in particular that the rendering industry does not receive support under this scheme in respect of material being processed under the Over Thirty Month Scheme. In devising the detailed arrangements we have sought to strike a fair balance between the interests of renderers and the taxpayer, and between different renderers.

Any differences between payments on account and entitlement under the scheme will be made up through adjustments to payments under the scheme. Depending on the level of sales income and throughput in the remainder of the year, the final scheme is expected to cost the taxpayer in the region of £100 million to £110 million.

As a condition of receiving support, rendering companies will continue to be required to maintain their prices and charges to their suppliers at the levels applying before 20th March 1996.

In order to assist them in devising support arrangements for the rendering industry, the Government engaged the services of Coopers & Lybrand. Their report to the Government on the rendering industry will be published and copies will be placed in the Library of the House.

We have announced that up to a further £59 million support to the disposal chain will be available in 1997-98 as slaughterers and renderers adjust to the changed value of animal by-products. We are now opening discussions with these industries about what form this support should take.