An Irish Parliamentary Committee has just published the results of its investigation into the pork dioxin crisis in Ireland last December, which led to the slaughter of pigs on a number of farms which had been fed contaminated feed and the recall of all Irish pork products produced since 1 September from the home and export markets. In an earlier post, I provided some background to the crisis. I argued that the contamination incident raised three questions: how was it that the praised EU hygiene controls broke down in this instance? What will be the overall cost to the sector and to the economy of the dioxin contamination and the product recall? And who will be asked to bear this cost? The Parliamentary Committee report makes some interesting findings on the first of these questions.
It highlights two weaknesses of the food hygiene control system. The first weakness was that the remit of the Food Safety Authority of Ireland, the agency established to enforce food law, does not cover the whole food chain. It was only given responsibility for food safety from the farm gate onwards, while animal feed and animal health controls on the farm remain the responsibility of the Department of Agriculture and Food. The Department argued that the plant, which converted food waste into animal feed, was low-risk and it was inspected annually to determine that it was in compliance with the hygiene regulations. However, HACCP programmes have not included oil contamination as a potential hazard, and there are no EU regulations requiring the sampling of oil used in feed processing.
A second weakness concerned the food traceability system. This was introduced as a legal requirement in the EU food system in the 1990s in the context of dealing with animal health, disease control and disease eradication. The legal requirement on the food business operator is to be able to trace one step forward and one step back. The system worked exactly as it should have at farm level. When the contaminated pork was identified at factory level, this could be traced back to the farmer suppliers, who in turn could identify the source of their feed, and in turn, the other customers of this feed plant in both the Republic and Northern Ireland could be traced.
The difficulty concerned the traceability system beyond slaughter. Although less than 10% of pork products were potentially affected by the contamination (sourced from the nine farms which had purchased contaminated feed from the single mill), 100% of product had to be recalled. In Denmark, a sophisticated traceability system would allow Danish rashers purchased by a customer to be traced back to a particular process in a particular plant at a particular time on a particular day. No such system operates in Ireland. Although the Department of Agriculture and Food has set up a review group to consider what improvements can be made, it highlights the extra costs this would imply for processors and the tight profit margins in which they operate.
However, it is not acceptable that an industry can externalise the costs of the risk of a food safety breakdown in this way. In the recent Irish supplementary budget in April 2009, the Minister confirmed that he was setting aside €200 million to compensate processors for the cost of the product recall (of which €20.7 million is being provided by the EU). The farmgate value of the output of the pig sector was €293 million in 2007. The value of exports (which account for 67% of total output) was €367 million in that year, so we might estimate that the value of processed pigmeat on the home market was around €183 million. The value of the €50 million exports of live pigs mainly to Northern Ireland should be added to this, giving a total industry value of output of around €600 million. Seen against this figure, the €200 million which the product recall may cost the Irish (and EU) taxpayers is a not insignificant subsidy to the industry to protect its reputation in overseas markets.