BSE threatens UK's pounds 5bn meat industry

THE revived scare over mad cow disease is threatening the livelihoods of hundreds of beef farmers and the viability of the beef industry as a main source of export revenues.

Britain's beef industry had revenues of pounds 5bn in 1994 - twice the turnover, for example, of book publishing. It exports 22 per cent of the 900,000 tonnes it produces annually - making it a significant export earner. But farm prices of beef have fallen by 10 per cent this week and are expected to fall further next week, while wholesalers report that sales have fallen by 25 per cent in the past two weeks.

The effect could be drastic. "Farming income is very sensitive to price," said Tom Maher, of the economics unit at the National Farmers' Union. "A price fall of 10 per cent can bite 50 per cent out of net income."

Equally seriously, European countries including France are threatening to ban beef imports from the UK, citing fears that bovine spongiform encephalo- pathy (BSE) could spread to their herds. "Of exported beef, 80 per cent goes to Europe, and France takes almost three-quarters of that," said Mr Maher. "Any threat by them would be extremely grave for the British industry."

The British beef industry has been one of the country's success stories in the past 15 years. Until 1992, the UK was a net importer, supplementing its own output with beef from Ireland and Argentina. But when Norman Lamont misjudged the money markets, leading to the pound falling out of the European Monetary System on "Black Wednesday", British beef farming perked up. The weaker pound was more competitive abroad, and exports boomed.

But the BSE scares of 1990 and the past six weeks - the latter sparked in November by a TV programme that suggested that 600 BSE-infected cows were being eaten every week, plus a declaration by an eminent former government scientist, Sir Bernard Tomlinson, that he had given up eating beef on health grounds - could have a long-term effect on the industry.

More than a thousand schools have taken beef and beef products off their menus, while supermarkets have reported small but noticeable falls in beef sales by consumers. In November, beef sales were 5 per cent down compared with 1994, reported the Meat and Livestock Commission.

"The only parallel is with the scare over salmonella and eggs in 1988," said Stephen Howe, editor of Farmer's Weekly, the industry's bible. "And it took a very long time for egg and poultry sales to recover." Ironically, that scare was sparked off by a government minister - Edwina Currie.

This time, the concerted efforts of government ministers such as the current Secretary of State for Health, Stephen Dorrell and agriculture ministers Douglas Hogg and Angela Browning have failed to convince the public that eating beef poses no risk of developing the human equivalent of BSE.

The average beef farm generates sales of pounds 55,000 a year, and makes a profit of pounds 10,000. But beef farming is highly price-sensitive and less profitable than dairy or cereal farming. Moreover, farmers' profits in those areas are protected by quotas and price-fixing legislation.