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MINISTRY OF AGRICULTURE, FISHERIES AND FOOD
1. Case No. C.202/98
Arrangements in respect of cattle slaughtered under the Over Thirty Month (Slaughter) Scheme
1.1. Mr Hodges complained that neither the Ministry of Agriculture, Fisheries and Food (MAFF) nor the Intervention Board (IB) had given him information about what he should do with the carcasses of two cows which had had to be put down ("casualty cows") if he were to qualify for compensation under a European Community co-financed compensation scheme (the Over Thirty Month (Slaughter) Scheme (OTMS)); and that IB had subsequently refused him compensation because he had not complied with OTMS requirements for disposing of the animals.
1.2. My investigation began in October 1998 after I had obtained comments from the Chief Executive of IB. Comments were later also obtained from the Permanent Secretary of MAFF. I have not put into this report every detail investigated; but I am satisfied that no matter of significance has been overlooked.
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Background
1.3. On 27 March 1996 European Commission Decision 96/239/EC on emergency measures to protect against bovine spongiform encephalopathy (BSE) prohibited the export of live cattle from the United Kingdom (UK). On 19 April 1996 Commission Regulation (EC) No 716/96 was published. That Regulation established a European Community co-financed scheme under which the UK government was authorised to purchase for slaughter any cattle aged more than 30 months and which did not show any clinical sign of BSE. The regulation specified that such cattle should be killed in specially designated abattoirs under the supervision of a government representative; and it described special arrangements for the staining, transport and destruction of the carcasses. The Regulation permitted on-farm slaughter of cattle under the scheme if existing animal welfare practice would require that. It permitted the UK government to limit access to the scheme if the number of cattle presented exceeded the number for which there was capacity for destruction. The Regulation applied from 29 April 1996.
1.4. IB undertook the implementation of the Regulation in the form of OTMS. In a guide to OTMS issued in June 1996, IB instructed that animals needing to be put down should be examined by a veterinary surgeon and slaughtered on-farm within 24 hours of the examination. The farmer should dispose of the carcass on the day of slaughter by contacting the Licensed Animal Slaughter and Salvage Association, who would arrange a time and place for the farmer to deliver the carcass, which would need to be accompanied by an emergency slaughter certificate provided by the veterinary surgeon.
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Mr Hodges's case
1.5. On 7 July 1996 Mr Hodges wrote to IB seeking advice on claiming compensation for two casualty cows which had been slaughtered on his farm on 1 and 2 May. He said that he had spoken to a representative of IB at the MAFF stand at the Royal Show, who had told him that compensation could be payable for those animals under OTMS. He enclosed a slaughter certificate dated 1 May for one of the cows. On 24 August Mr Hodges wrote to IB in response to a telephone call he had had from them querying his letter of 7 July. He informed them that after slaughter the cows had been taken to Mink Hound Kennels. He enclosed a copy of his account with the livestock services firm which had removed the carcasses on 2 May. On 31 January 1997, following a reminder from Mr Hodges, IB replied, apologising for the delay in doing so. They said that in order to qualify for compensation under OTMS his cows should have been presented to a designated collection centre on a designated day. Mink Hound Kennels was not such a centre, so compensation under OTMS was not payable.
1.6. On 21 February the National Farmers Union wrote to Mr Hodges's then Member, asking him to refer Mr Hodges's case to me. They said that there was a "grey area" relating to casualty cows killed in April and May 1996 and that, despite repeated requests to MAFF in other similar cases, they had been unable to obtain a decision on the point. IB had refused Mr Hodges's request for compensation as he had not sent the cows to a designated collection centre. The NFU said that in April and May 1996 no such requirement had been operative. Mr Hodges and his veterinary surgeon had made exhaustive enquiries at the time to ascertain where the cows should be sent, but neither MAFF nor IB had been able to give advice. In the circumstances, Mr Hodges expected to receive compensation for the animals. On 14 March the then Member wrote to MAFF seeking comments on Mr Hodges's case. On 3 April MAFF replied that IB's letter of 31 January had explained why they could not pay compensation under OTMS for Mr Hodges's cows. IB's role was to administer the scheme in strict compliance with the Regulation. The Regulation had come into force on 29 April 1996; but, although arrangements had been made reasonably quickly for the presentation of healthy stock through collection centres for slaughter at designated abattoirs, it had taken until 24 May to finalise comparable arrangements for casualty animals which could not be delivered live to the abattoirs. MAFF concluded that as Mr Hodges's cows had not been slaughtered and disposed of within the terms of the scheme IB's decision to refuse him compensation was correct.
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IB's reply to the complaint
1.7. (Initially IB took the view that the matters complained about were for them.) In his comments on the complaint, the Chief Executive of IB said that before the introduction of OTMS, cattle which had to be slaughtered on-farm had had to meet several requirements before they could be sold for human consumption, including the provision by a veterinary surgeon of an emergency slaughter certificate. Because of the strict criteria, many such cattle were sold to knackermen and consigned for pet food. Those that were sent to abattoirs for human consumption usually had a low value, as they often had had substantial parts of the carcass condemned. The introduction of OTMS had led to a relaxation of those procedures for cattle consigned to incinerators, as there was no risk to public health.
1.8. The Chief Executive said that there was no record of any advice given to Mr Hodges in May 1996, but that IB would have advised anyone in his position that a casualty animal could be presented into OTMS only with an emergency slaughter certificate which declared it fit for human consumption. Mr Hodges had subsequently provided a certificate for only one of his cows. IB would also have advised Mr Hodges that presentation into OTMS could be made only at a designated abattoir on a designated day. At that time, IB had been compiling a provisional list of abattoirs before designation and final approval; but the list had not been finalised when Mr Hodges had slaughtered his cows, so no details could responsibly have been released then. Moreover, it had been necessary for MAFF's veterinary service to assess, by inspection, the suitability of proposed facilities as soon as IB designated them. It had therefore not been possible for Mr Hodges's cows to be accepted into OTMS.
1.9. The Chief Executive said that in order to begin operation of OTMS IB had had to contract or designate facilities such as markets, abattoirs, rendering plants, incinerators and transport. OTMS had begun operation in some areas a few days after Mr Hodges's cows had been killed. Slaughter provision had been available in all areas from the week commencing 13 May. Additional casualty disposal arrangements had been in place by 24 May.
1.10. The Chief Executive concluded that there was no regulatory requirement to ensure that every animal potentially eligible for OTMS could be accepted at any time, nor would it be reasonable to expect that. The Regulation permitted the government to limit access to the scheme in line with available destruction capacity; in that sense, the scheme had made little difference to the market conditions which had prevailed before its introduction. Disposal of cattle, whether through normal market channels or as casualties, was entirely dependent upon a suitable outlet being available. At the time when Mr Hodges's cows had been killed, there had been no contracted slaughter or destruction capacity available to operate the scheme. IB had no discretion under the Regulation to pay compensation on animals killed before the start of the scheme.
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Investigation
1.11. My staff asked Mr Hodges when he had first heard about OTMS. Mr Hodges said that he had been aware of the scheme at the time when his two casualty cows had been slaughtered. He said that when he and his veterinary surgeon had telephoned MAFF and IB to find out how to dispose of the first of the casualties under OTMS, they had been referred to several telephone numbers and eventually told that there was nothing worked out for OTMS at that stage. When asked why he had supplied an emergency slaughter certificate for only one of the casualties, Mr Hodges replied that he had not wanted to incur further expense for the second cow if he could not be compensated under OTMS. My staff also examined MAFF's files relating to the introduction of OTMS. The papers indicate the following key events relevant to Mr Hodges's case.
1.12. On 16 April 1996 the then Minister of Agriculture, Fisheries and Food announced in the House of Commons that the European Community co-financed scheme would come into effect in the week beginning 29 April. Also on 16 April IB wrote by fax to licensed abattoir owners inviting expressions of interest in participating in OTMS; replies were sought by the following day. On 17 April IB received legal advice that legislation was not required to enable abattoirs to be designated for OTMS; the Minister could simply compile a list of interested abattoirs and pronounce them designated. On 19 April IB prepared a draft application form for abattoirs wishing to be designated, for issue on 22 April. Also on 19 April IB met the United Kingdom Renderers' Association to discuss a basic operational framework for OTMS; they noted that a further meeting was scheduled to formulate detailed operational procedures, with the objective of synchronising the flow of material from abattoirs with the capacity of rendering plants.
1.13. On 23 April IB noted that in order to honour the Minister's assurance that the scheme would start during the week beginning 29 April, slaughtering under it would need to start on 1 May. They also noted that they had begun to draft contracts for abattoirs and renderers, although there remained a number of unresolved issues. On 25 April IB produced a note for the operators of a telephone help line which they had set up to advise farmers and others about the operation of OTMS. Among other things, the note said that collection centres for the scheme would be designated in the near future, and that arrangements which remained to be determined would be made for casualty animals.
1.14. On 30 April IB and MAFF officials met industry representatives to discuss unresolved issues and develop operational procedures for OTMS. IB said that some 40 abattoirs in England and Wales would be invited to participate in OTMS. It was acknowledged that initial demand for the scheme would far exceed the capacity of renderers to deal with carcasses. It was agreed that casualty animals would have to be dealt with immediately. (MAFF have told me that that conclusion recognised the fact that casualty animals had to be slaughtered immediately to avoid unnecessary suffering and that the processing of carcasses of such animals could not then be deferred. However, they said that the top priority had been to deal with the very large numbers of healthy animals which were rapidly building up on farms and creating serious welfare and economic problems for the industry.) IB said that to make full and efficient use of rendering capacity it would be necessary to link each rendering plant with a group of participating abattoirs on a geographical/logistical basis. It was concluded that abattoirs and renderers would agree local operational arrangements based on details of participating abattoirs which made maximum use of rendering capacity.
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1.15. Also on 30 April IB produced a working draft leaflet on OTMS. It was not publicly circulated, but was used by the telephone help line, in conjunction with the note of 25 April, to give advice to enquirers. The draft leaflet said that when payment of compensation under OTMS was to be made based on deadweight, the animals should be presented direct to designated abattoirs for slaughter on pre-arranged days. The bodies of animals emergency slaughtered on-farm had to be transported direct to a designated abattoir operating on that day, and be accompanied by an appropriate veterinary certificate. Farmers should contact IB or their local National Farmers Union for details of designated abattoirs in their area. Abattoirs wishing to be designated for OTMS should apply to IB on the form provided, specifying fixed days of the week which would be set aside for OTMS animals. IB would check their credentials and operations, relevant details of which were asked for on the application form, and ask MAFF's veterinary service to check that they met a list of qualifying conditions. The registration process should take only a few days, after which IB would write to the abattoir to confirm designation and inform farming organisations that the abattoir could accept animals under OTMS on the specified days of the week. The abattoir could then negotiate for deliveries of animals on those days; they could slaughter only those animals which they could dispose of to approved renderers on the day of processing. The application form asked whether the abattoir normally dealt with casualty animals. That day MAFF wrote to the "Veterinary Record" asking them to publish on 3 May a letter explaining the need to provide an emergency slaughter certificate to accompany to the designated abattoirs casualty animals slaughtered on-farm; they said that a copy of the new certificate (which was a slightly modified version of the one already in use - paragraph 1.7) was available from Divisional Veterinary Managers, who would be writing to veterinary practitioners explaining the on-farm slaughter requirements.
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1.16. On 1 May IB circulated a list of 44 abattoirs which had been provisionally approved to operate as collection centres for OTMS. On 2 May MAFF sent farmers an information note listing those 44 abattoirs. The note said that farmers wishing to enter cattle into OTMS should contact a collection centre to arrange a date for delivery; there was likely to be great pressure on collection centres early in the scheme, so it would not be possible for them to deal immediately with all cattle that farmers might wish to present. (IB have told my staff that some of the abattoirs on that list had not been contracted to IB and would not have been able to operate OTMS because they had no means of disposing of the carcasses. There had been significant regional variations in the speed with which it had been possible to match abattoirs with disposal facilities, and only a small number of designated abattoirs had been available before 13 May.) On 3 May MAFF asked IB to take forward with the Renderers' Association proposals aimed at securing agreement between abattoirs and renderers regarding the slaughter totals to be taken by abattoirs under OTMS. That day the first cattle were slaughtered under OTMS (in Scotland). On 4 May IB agreed that MAFF's proposals regarding slaughter totals had the makings of a viable basis for matching slaughtering with rendering capacity, and should enable OTMS to get under way in England and Wales on 7 May.
1.17. On 7 May one abattoir in England slaughtered some cattle under OTMS to test the system. On 8 May the Minister met industry representatives to discuss OTMS. It was noted that the limiting factor as regards rendering was transport capacity, so renderers wanted to service only 20 abattoirs to maximise throughput. It was suggested that the scheme should operate on that basis for a couple of weeks, but that the aim should be to increase the number of abattoirs in the longer term by the use of a rotation system or storage of carcasses. It was recommended that renderers should be dedicated to certain abattoirs. Asked how casualty animals would fit into the scheme, the Minister said that he had made clear to abattoirs that he expected them to take casualty animals. (MAFF subsequently told me that they and IB had made every effort to ensure that arrangements for casualty animals were put in place as quickly as possible, even though those arrangements had been among the most complex to be established under OTMS.) That day IB wrote to the Renderers' Association enclosing a list of 20 abattoirs against which they had specified dedicated renderers. They said that the Renderers' Association had confirmed that, on the basis of renderers determining operational arrangements with abattoirs, including the numbers to be slaughtered and the days of working, rendering would commence that day, and the full throughput specified in the programme would be achieved in the week beginning 13 May. On 9 May MAFF noted that 21 abattoirs were scheduled to start slaughtering cattle under OTMS that day. They have said that the arrangements became fully operational throughout the UK on 16 May with the arrangements for casualty animals coming fully into operation (except in Scotland) on 24 May.
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1.18. On 6 November, in response to a request from MAFF who wanted all such cases identified so that a common approach to them could be determined, IB sent MAFF a list of appeals (including one by Mr Hodges) received by IB concerning casualty animals which had been slaughtered and their carcasses disposed of outside the conditions of OTMS. They said that for those animals slaughtered between 29 April and the start of the casualty arrangements on 24 May access to the scheme had been limited. They added that they had been made aware of many cases in which, because of difficulties in being accepted into the scheme after it had become operational, compensation had effectively been denied, as potential casualties had had to remain on the farm and their condition had worsened until they were unfit for human consumption and therefore ineligible for compensation. On 4 December a MAFF official circulated to officials in the territorial departments with regional responsibility for agriculture (that is, those for Scotland, Wales and Northern Ireland) (who shared with MAFF responsibility for UK policy on OTMS) a draft submission for MAFF Ministers. The draft said "for casualty animals slaughtered once the scheme regulation was in place, there would have been some legitimate expectation of compensation". It recommended that compensation should be paid to farmers who had slaughtered casualty animals since 29 April but had been unable to enter them into OTMS, provided the slaughter had complied with the general requirements of the scheme (other than the disposal requirements) and that that could be shown by documentary evidence such as a veterinary certificate. On 5 December the Welsh department replied that they did not disagree with MAFF's proposed action. On 20 December another MAFF official noted that any such payments should be made on an ex gratia basis and restricted to cases where the fault arguably lay with MAFF or IB, such as where MAFF or IB had given incorrect advice or as a result of a failure to have provisions for casualty animals in place on 29 April; delays in access to OTMS because of demand having exceeded capacity would not give rise to such a payment, because the Regulation allowed the government to limit access to the scheme if necessary. On 23 December the Scottish department replied that they had some sympathy for some cases involving casualty animals, but the wider implications of offering compensation needed to be clarified. On the same day the Northern Ireland department replied that they agreed in general with MAFF's draft submission.
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1.19. On 16 January 1997 MAFF officials sent to their Permanent Secretary a submission intended for MAFF Ministers recommending that ex gratia payments should be made on casualty animals slaughtered between 29 April (when the Regulation had come into force) and 24 May (when the arrangements for dealing with casualty animals had been properly implemented), if the animals had been ineligible for OTMS payments through no fault of the farmer and where appropriate documentary evidence was provided. They said that the submission had been agreed with the territorial departments. On 20 January MAFF noted that the Permanent Secretary's preliminary conclusion was that ex gratia payments should be considered for all appropriately documented casualty animals which had been slaughtered since 29 March 1996 (when the ban on the sale of meat from cattle more than 30 months old had taken effect, thus removing any possibility of a return on casualty animals), but which had been ineligible for OTMS payments through no fault of the farmer. MAFF decided to consult, without commitment, the territorial departments and farming unions, to try to establish the size of the problem before placing the submission before Ministers. On 23 January the Scottish department replied that there remained fundamental questions which had not been addressed; they questioned whether farmers had had a reasonable expectation of payment for casualty animals and mentioned presentational and financial concerns. On 18 March MAFF informed the Permanent Secretary that it had become clear officials in the other departments were opposed to making any ex gratia payments. They recommended that a decision on the matter should be deferred until after the impending general election.
1.20. On 19 June the Permanent Secretary sent a submission to MAFF Ministers recommending that ex gratia payments be made on casualty animals slaughtered between 29 March and 24 May 1996. On 30 July the Minister for Agriculture, Fisheries and Food wrote to his counterparts in the other departments proposing to make such payments. On 6 August the Secretary of State for Scotland replied saying that he was far from convinced that compensation for the casualty category was justified. He feared that if special treatment was given to one class of case, others would lobby hard for similar treatment. His strong preference was to refuse payment to any category of "hard case" He said "if you do decide to proceed ............ I feel that the arrangements will have to be applied nationally". On 8 August the Secretary of State for Northern Ireland replied saying that her department had previously resisted proposals along such lines for fear of prompting compensation claims from others who felt that they had lost out because of BSE but for whom no provision was being made. She said "since you are proceeding in respect of England at least, I can agree to the inclusion of Northern Ireland in the proposed new scheme". On 22 August the Minister replied to the Secretary of State for Scotland saying that the proposal to offer payment only for casualty animals was defensible and that he had little alternative for there was a realistic prospect of my concluding, if a complaint were referred, that "at least some of the fault" lay with the agricultural departments. On 29 August the Parliamentary Under Secretary at the Welsh Office wrote agreeing with the Secretary of State for Scotland and saying that the Welsh Office took the view that it was not possible to isolate deserving "hard cases" in the way MAFF proposed. He concluded: "If any payments are made they will need to be paid to farmers in Wales as well. However, I am not yet convinced that we should ask the Intervention Board to put arrangements in hand." In September MAFF officials advised MAFF Ministers that, following discussions with their territorial departments counterparts, officials in those departments accepted that MAFF would have little defence to offer were I to investigate a complaint of the kind that has since been put to me, and that there was clear agreement that any compensation scheme must apply across the UK as a whole. On 8 October the Minister wrote to the Parliamentary Under Secretary at the Welsh Office (copying his letter to the other Ministers involved) reaffirming his position.
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1.21. Even so, on 29 October MAFF officials sent to the Permanent Secretary a draft submission for MAFF Ministers saying that despite two interventions from the Minister they had been unable to secure the agreement of the other departments to a compensation package and recommending that the proposal be dropped because "it would be a nonsense to run an England-only scheme" and because there was at that time no pressure for such payments from individuals or unions. The draft submission said: "The Minister could in principle press ahead with compensation arrangements in England although it would then fall to MAFF, rather than the Intervention Board, to make payments. It would be very hard to defend action limited to only part of the UK, although it is possible that one of the other Departments...might follow suit ....Such little heat as there ever was in the issue, has cooled.... The £1 million or so that compensation would have cost will be ... welcome." The draft submission went on to note that the referral of a complaint to me could not be ruled out. A view could be taken on the scope of any compensation should I rule in a complainant's favour.
1.22. On 23 February 1998 MAFF officials noted that their Ministers had accepted that, given the reluctance of the other departments to agree to make ex gratia payments, they could not make such payments in England alone, and must conclude that such payments could not be made anywhere. That day MAFF wrote to the National Farmers Union saying that they could not offer compensation for casualty animals slaughtered on-farm in the first few weeks of OTMS; the slaughter and subsequent disposal of carcasses had not been in accordance with scheme rules and, some 21 months on, it would in many cases be virtually impossible to establish whether animals had ever been eligible for the scheme. MAFF maintained that view in subsequent correspondence on the subject with the National Farmers Union.
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Findings
1.23. The ban on the sale for human consumption of meat from cattle more than 30 months old removed a segment of the market for those animals, including animals which had had to be put down. The European Community co-financed scheme given effect by OTMS was intended to compensate for that. The relevant Commission Regulation applied from 29 April 1996; and Parliament was told that the scheme would come into effect in the week beginning on that date. It is true that the relevant Regulation permitted the government to limit access to the scheme if the number of cattle presented exceeded the number for which there was capacity for destruction. Had it been that stipulation, lawfully applied, which precluded Mr Hodges from receiving compensation he would have had no legitimate cause of complaint. That stipulation, however, was not germane to the situation and the circumstances applying in Mr Hodges's case at the time when his two cows were put down. The situation then was that the existing slaughter and destruction capacity was not being used, and few or no cattle could be presented into OTMS, because operational problems - in particular, the matching of the ample slaughtering capacity of abattoirs with the limited destruction capacity of renderers - had still to be resolved. The fact that Mr Hodges was unable to obtain access to OTMS for his casualty cows was not as a result of the normal application of the Regulation. I accept that the scheme was not intended to provide compensation for animals which were unfit for human consumption. For that reason, the validity of Mr Hodges's claim for compensation for one of his cows must be doubtful in the absence of a veterinary certificate (paragraph 1.11). However, Mr Hodges, like other farmers, had been given a public commitment that during the week beginning 29 April 1996, subject to the stated conditions, he should be able to present animals for compensation under OTMS, and (by implication) that appropriate arrangements would be in place to deal with compensation for any casualty animals which could be shown to be fit for human consumption.
1.24. The fact that on 3 May 1996 some cattle in Scotland were slaughtered under OTMS still left the Ministerial commitment largely unfulfilled. IB have acknowledged that the scheme was not operational nationally before the week beginning 13 May. I recognise the difficulties under which officials were operating. There were considerable logistical obstacles to be overcome, as the timetable for the scheme's introduction was very tight. Nevertheless, a public commitment had been given. I concluded that there was a failure to fulfill that commitment therefore, though there were extenuating circumstances. Indeed, in his report 'BSE: The Cost of a Crisis' the Comptroller and Auditor General has said "The Ministry and the Board had to set up the scheme within a very short time and under extreme pressure .... The National Audit Office regard these as impressive results in the circumstances." Nevertheless proper arrangements for casualty animals were not in place until 24 May. That aspect of the scheme had needed to be a priority, for farmers had no choice about when to present casualties into OTMS.
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1.25. Regarding the information given by MAFF and IB to Mr Hodges (paragraph 1.11), I note that on 2 May 1996 MAFF issued a list of provisionally designated abattoirs, but it seems that that information was not being given out on that day by IB's telephone help line in response to specific enquiries about casualty animals. In view of the early stage that arrangements for the operation of OTMS had reached, it may well be that the provision of such information would not in any event have helped Mr Hodges to dispose of his cows in accordance with the scheme rules. Nevertheless, I find it surprising that on the one hand MAFF's information note told farmers to contact abattoirs on the list, while on the other IB took the view that that information could not responsibly be passed on to enquirers. To that extent, the briefing note to which the help line operators were working at that stage (paragraph 1.13) appears to have been outdated. That denied callers whatever opportunity there might have been to make early use of the scheme.
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1.26. Mr Hodges first sought compensation for his casualty cows on 7 July 1996. It was not until six months later that IB finally told him (correctly) that compensation could not be paid under OTMS. That was a long delay: nor in their reply did IB address the obvious consequence - whether compensation on an ex gratia basis might be appropriate, either from IB or from MAFF. I criticise them for that.
1.27. In the event, the National Farmers Union took up Mr Hodges's case and others. Meanwhile, at official level MAFF had recognised that there seemed to be circumstances in which ex gratia payments would be appropriate (paragraph 1.19). The ex gratia payments recommended by MAFF's submission of 16 January 1997 to the Permanent Secretary were measures which Mr Hodges's case and those like it clearly required. MAFF subsequently obtained their Minister's approval for the proposed payments. Regrettably, however, the compensation proposal was eventually dropped (paragraph 1.22). I deal in turn with the two grounds which were advanced.
1.28. The first was that the territorial departments were reluctant to agree to make the payments proposed and it would be nonsensical to make them only in England. Even if that is so, it does not follow from it that payments which were fair, just, and necessary if commitments given were to be fulfilled should not be made, even if it was uncertain whether the other departments would follow suit. MAFF themselves appeared to accept that it was open to them, as opposed to IB, to make ex gratia payments.
1.29. The second ground was that by the time the decision was taken such pressure for payment as there had been from individuals or unions had abated. I do not regard that as an acceptable reason for deciding not to remedy an identified injustice. In any event, it is clear from the papers I have seen that individuals like Mr Hodges remained concerned about the issue and were merely deferring further action on the basis of assurances that the matter was being examined. The correspondence which the National Farmers Union undertook with MAFF as soon as MAFF informed them that payments would not be made, and Mr Hodges's complaint to me, both indicate that the absence of pressure on MAFF to provide redress at the time the decision to refuse compensation was taken was the result of patience rather than any lack of concern on the part of those affected.
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1.30. In sum, I regarded MAFF's refusal of compensation as flawed. Moreover, in conveying the Ministerial decision to the National Farmers Union on 23 February 1998, I considered that MAFF had failed to reflect the grounds on which the decision was based (paragraph 1.22). They had said that the slaughter and subsequent disposal of the animals in question had not been in accordance with OTMS rules, but the whole point of the exercise had been to consider whether payment outside the rules was warranted; and they had pleaded difficulties in verifying claims some 21 months on, despite the known existence of at least some appropriate documentation in cases like that of Mr Hodges, and despite the fact that MAFF had been aware of the problem for 16 of the 21 months period to which they referred. I note, too, that in their draft submission MAFF officials had observed that the saving in compensation would be welcome (paragraph 1.21).
1.31. When I put my findings to the Permanent Secretary of MAFF he replied:-
"This Department has always believed thatex gratia payments should be made to producers such as Mr Hodges. The fact that such payments have not yet been made is by no means attributable to us or to maladministration on our part. The payments have not been made because my Department does not have the power to decide without the agreement of the other three agriculture departments to make such payments or to instruct IB to make them. This reflects the fact that the direction given to IB by the four agriculture departments to operate OTMS under section 6(1) of the European Communities Act 1972 reserved any residual power in connection with the scheme jointly to the four agriculture departments. The power to instruct IB to make the ex gratia payments could therefore only have been exercised by the four departments jointly. At the heart of this case lies the problem that arises when Ministers fail to agree on a matter on which they have joint responsibility. In this instance mine was the only Department that supported an ex gratia payment to Mr Hodges. It therefore seems inappropriate to single out MAFF for criticism when such a payment has not been made.
However I agree (as we have always said) that an ex gratia payment should be made to Mr Hodges and others in comparable positions. I am therefore asking my colleagues in the other agriculture departments whether they can now agree that IB should be instructed to make ex gratia payments in the way we have proposed."
1.32. I had also copied my report in draft to the territorial departments. In the light of that, each agreed to MAFF's renewed proposal that ex gratia payments should be made on those OTMS casualty animals slaughtered between 29 April 1996 (when the Regulation took effect) and 24 May 1996 (or 10 June 1996 in Scotland) (when the casualty arrangements had been put in place). Payments are to be subject to the producer providing documentary evidence, such as a casualty slaughter certificate, that the animal concerned had been otherwise fit for human consumption when slaughtered, and are to be made at a flat rate of £230 per animal.
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Conclusion
1.33. There were substantial difficulties facing IB and MAFF in setting up arrangements for dealing with casualty animals under OTMS and in subsequently compensating farmers for the financial consequences of the failure to have such arrangements in place in good time. IB and MAFF were not able at the time to overcome all those difficulties, although I recognise that considerable efforts were made. Compensation arrangements have now been agreed which will be of benefit to Mr Hodges and others in a similar position. I regard that as a suitable outcome to a justified complaint.
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