QMS Poised for Vital Role in Era Ahead

The work Quality Meat Scotland (QMS) undertakes to clearly differentiate the industry’s beef, lamb and pork brands will have a crucial role to play in the post-Brexit future of the Scottish red meat industry.   This was the clear message from QMS Chairman, Jim McLaren, today (Nov 1, 2016) who said that no matter what scenario emerges in the coming years, the importance of stimulating demand for red meat from Scotland will be paramount.   Speaking in Edinburgh at the launch of the QMS Annual Review, Mr McLaren also highlighted the importance of the red meat export trade to Scotland. And he said it was vital there is strong awareness and clear understanding of the potential impact of political decisions relating to Brexit, on Scottish livestock farming and the wider industry.   QMS will, he said, shortly be publishing a specially-commissioned report which highlights the disproportionate importance of the Scottish red meat industry to Scotland’s economy.   “The uncertainty surrounding Brexit is a significant concern for those operating in the Scottish red meat industry and it is vital that this lack of clarity does not constrain decision-making, investment and long-term planning,” said Mr McLaren.   The three key areas of uncertainty, he said, relate to trade relationships, the availability of labour in the red meat sector for abattoir work and agricultural policy.   “The lengthy time involved in livestock production means that it is hard for farmers to plan for changes that may emerge in the coming months,” said Mr McLaren.   “For example calves born in spring 2017 will be marketed in 2019 and 2020 – when we may no longer be part of Europe and we don’t know what changes may have taken place by then.”   Focussing on the trade scenario, he said the challenge is that while in the short-term exchange rates are favouring exports, the extent to which there will be free trade with Europe and the rest of the world in two year’s time is unknown.   “At one extreme, if there is completely free trade the door could be open to low-priced beef from around the globe. However, we would also have tariff-free access to the important EU market for our lamb for example.    “The other extreme is there is no free trade agreement in which case we will have to trade with Europe as a non-member state with no tariff rate quotas and we will have to pay full rate European tariffs.”  Either scenario would, he said, have significant implications for farmgate and wholesale meat prices.   The uncertainty around overseas trade was of particular concern to Scottish red meat processors who export around 10% of their total production outwith the UK. Around a quarter of sheepmeat production is exported outwith the UK and the export of fifth quarter products has an important role to play in maintaining overall carcass value.   “It is clearly incredibly difficult for a red meat exporter to plan strategically for the coming years when there is so much uncertainty about what the future will hold,” said Mr McLaren.   There could also be significant implications for labour in Scottish abattoirs and cutting plants given the importance of workers from mainland Europe to these roles, added.   Uel Morton, QMS Chief Executive, said the uncertainty was also presenting challenges to QMS as an organisation.   “Decisions taken in the coming months may have significant implications for QMS activities as well as on our income,” said Mr Morton.   “However, as an organisation we are light on our feet and ready to respond to the new market situation on behalf of our levy payers and we remain 100% committed to achieving value for money for them in everything that we do.”   During the year to 31st March 2016 the organisation’s total income was £6.3 million (compared with £6.8 million in 2015). Income from the statutory red meat levy for the year was just under £4 million, compared with £4.1 million during the previous year.   Turning to the detail of QMS’s financial accounts, Mr Morton observed that during the year under review around £786,000 of income from grants was used to deliver qualifying activities.    Although lower than the previous year, grants remain a vital addition to QMS income, added Mr Morton, with the reduction reflecting tightening public sector budgets.