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Annex 2 - Partial Regulatory Impact Assessment

PARTIAL REGULATORY IMPACT ASSESSMENT

1. Title of proposal

1.1 Full Transposition of Council Directive 92/119/EEC in relation to Swine Vesicular Disease ( SVD) and transposition of 2007/10/EC which amends annex 2 of Directive 92/119/EEC.

1.2 The full transposition will be carried out by the following statutory instrument:

1.3 The Swine Vesicular Disease (Scotland) Order 2009, made under the Animal Health Act 1981, will implement the control measures for this particular disease.

2. Purpose and intended effect

2.1 Objectives

2.1.1 The objective is to ensure that we have in place the most streamlined legislative measures that enable proportionate and targeted control measures to be applied during outbreaks of SVD.

2.1.2 Through the draft revised legislation we will be providing clarity as to our policy and producing fit for purpose legislation to be used in the event of an outbreak of disease, as well as meeting our obligation to fully implement Directive 92/119/EEC in relation to SVD and the amendment Directive 2007/10/EC.

2.1.3 The draft revised legislation provides clearer, and more appropriate disease control measures that could lead to reduction in the spread and size of potential SVD outbreaks, whilst minimising disruption to the livestock and related industries. This would benefit industry and the wider economy in the event of a disease outbreak.

2.1.4 The introduction of the draft revised legislation will meet our commitment to better regulation, as all the powers to control and eradicate SVD will be in one place. The following Orders will be revoked:

• the Swine Vesicular Disease Order 1972 ;
• the Swine Vesicular Disease (Amendment) Order 1973; and the
• the Swine Vesicular Disease (Compensation) Order 1972.

2.1.5 Importantly, we will no longer need to rely on the Foot-and-Mouth Disease (Scotland) Order 2006 when responding to the threat or incursion of SVD. In doing so we are placing animals which are not susceptible to SVD, such as sheep and cattle, outside the scope of the legislation. This will have the effect of limiting the impact that SVD related controls can have on the livestock not susceptible to SVD and associated industries in the event of a SVD outbreak.

3 Background

3.1 SVD is a disease of pigs. It is an exotic animal disease which is internationally recognised as potentially causing severe damage to the pig industry through direct losses of susceptible animals and impact on related industries and trade. Outbreaks have to be notified to the Office International des Epizooties ( OIE) and other countries refuse to accept any exports that might pose a risk of disease spreading. International standards require the elimination of the disease and country freedom is not recognised until this has been achieved.

3.2 In Scotland, there are approximately 450,000 pigs in Scotland, it is important that appropriate legislation is in place to control spread of SVD if an outbreak was to take place. The number of holdings and total pigs in Scotland is highest in the North East of the country as shown in Table 1.

Table 1.

Source:Scottish Agricultural Census 2007

3.3 The first outbreak of SVD in Great Britain ( GB) was in 1972. Over the following ten years 532 cases involving a total of 322,081 pigs were confirmed before the disease was eradicated from GB in 1982.

3.4 SVD has persisted in Italy, where in 2002 there were 171 outbreaks of this disease, with a further 31 cases in 2003, and further outbreaks through 2004, with the last reported cases in 2005. There were two cases in Portugal in 2004 and there has been a further case in June 2007. The rest of Europe is free of SVD.

3.5 Directive 92/119/EEC also covers African Swine Fever and Bluetongue, but these diseases have since had their own Directives, which have been transposed into domestic legislation (African Swine Fever (Scotland) Order 2003 and Bluetongue (Scotland) Order 2008). The Directive also covers other specified diseases such as Lumpy Skin Disease and Pest des Petits Ruminants. Further legislation is currently being considered to consolidate and revise our legislation for these diseases.

4 Rationale for government intervention

4.1 As already highlighted, we are presently reliant on applying Foot-and-Mouth Disease legislation when responding to SVD threat or incursion. This does not provide the best range of options possible for the control of SVD and unnecessarily imposes restrictions on animals that are not susceptible to SVD.

5. Consultation

5.1 This partial Regulatory Impact Assessment forms part of the consultation package. Its content builds on internal discussions within the Scottish Government and the Animal Health agency as well as with other UK administrations.

6. Options

There are two options which have been identified:

6.1 Option 1: Continue to rely on present controls (do nothing)

6.1.1 This option is not feasible because it does not fully implement the provisions of Directive 92/119/EEC and would leave us in breach of our legal duties and open to challenge.

6.1.2 The Swine Vesicular Disease Order 1972, states that Foot-and-Mouth Disease legislation would be used to control SVD, however, the Foot-and-Mouth Disease (Scotland) Order 2006 introduces new tougher controls for Foot-and-Mouth Disease which would not be appropriate for SVD. Using this legislation would have the effect of imposing unnecessary measures on livestock and related industries operating out with the pig sector.

6.1.3 For these reasons maintaining the current status quo is not an appropriate option and is not considered further.

6.2 Option 2: Transpose the Directive to introduce disease control legislation specific to SVD

6.2.1 By transposing Directive 92/119/EEC in relation to SVD we will be fulfilling our Community obligations. The draft revised legislation allows us to meet these and produce clarity as to the action which will be taken in the event of SVD threat or incursion. The basic principles of SVD control - notification of suspect case, veterinary investigation, stamping out of disease on infected premises and the imposition of movement controls to reduce the risk of the spread of disease, will be much clearer than in the existing legislation which is more relevant to FMD. The draft revised legislation will therefore help us move toward better regulation by achieving consistency across all the exotic notifiable diseases by reducing and consolidating legislation and ensuring standard procedures are in place wherever possible.

6.3 Additional requirements

6.3.1 The draft revised legislation does not introduce any additional requirements above the minimum requirements outlined in Directive 92/119/EEC, so Scottish livestock and related industries would not be put at a competitive disadvantage compared to their European counterparts.

6.3.2 In the consultation exercise we are consulting on whether the revised legislation should include the provision for temporary control zones. These are not provided for in the Directive 92/119/EEC, however we believe that the industry may wish Scottish Ministers to have such powers as an effective tool to help control the spread of disease. It should be noted that if we were to have a suspected vesicular disease case, we would likely in the first instance suspect Foot-and-Mouth Disease, due to the similarity of the diseases and a temporary control zone would be implemented under the Foot-and-Mouth Disease (Scotland) Order 2006. Once disease is confirmed, whether it be Foot-and-Mouth Disease or Swine Vesicular Disease, appropriate Protection and Surveillance Zones would be put in place, or if results were negative the temporary control zone would be lifted. Therefore this is not a new policy approach, but just a confirmation of policy already in existence.

7. Costs and benefits

7.1 Sectors and groups affected

7.1.1 The legislation has requirements that only take effect when disease is suspected or confirmed.

7.1.2 Disease control principles remain broadly the sameas those found in existing legislation; the controls are ones which have been used when responding to recent Foot-and-Mouth Disease and Avian Influenza outbreaks in GB. They represent proportionate and fit for purpose controls building on existing successful best practice. In addition, most livestock farmers will now be familiar with them so there is nothing new or additional in the burdens they would place on the industry in the event of an outbreak.

7.1.3 As disease controls are already applicable for SVD outbreaks under existing FMD legislation; businesses will not face additional costs from the full transposition of the Directive. Under the draft revised legislation the burden on business will actually be reduced if we have an outbreak in comparison to using the existing legislation, as the application of unnecessary restrictions on certain businesses and associated industries operating outwith the pig sector will be removed.

7.1.4 As in the FMD legislation applicable to SVD outbreaks, a Protection Zone will be imposed with a minimum radius of 3km around the Infected Premises and a Surveillance Zone with a minimum radius of 10km. In the Protection Zone no animal movements will be allowed except under licence, e.g. movement to emergency slaughter. In both the Protection and Surveillance Zones, there will be requirements for increased levels of biosecurity on farms, cleansing and disinfection of vehicles, people and machinery moving on/off farms. Movement of animals and animal products will be prohibited, except under licence. Products from animals in these zones will be subject to treatment to ensure destruction of virus.

7.1.5 The controls for SVD under the draft revised legislation are more proportionate than using the existing Foot-and-Mouth Disease legislation. For example, at present there are controls over milk and sheep shearing which are unnecessary in a SVD outbreak as it is a disease of pigs. It is not proportionate to restrict the day to day work of other, unrelated, farming sectors when responding to SVD threat or incursion. The draft revised legislation is specific to pigs and SVD and thereby removes the potential for unnecessary controls being placed on other sectors. This streamlines existing legislation and gives us the control to only take action when it is necessary.

7.1.6 The types of businesses covered by the draft revised legislation focus on the commercial pig sector and related industries (meat and meat products etc), the export industry and the agricultural supply industry (eg. feed manufactures and merchants) or other type of business that regularly visit premises where pigs are kept. These are the same businesses as would be affected under existing legislation, however those operating out with the pig sector are no longer captured by disease control measures.

7.2 Benefits under Option 2 (transpose the Directive)

7.2.1 Unless disease is present there is no economic impact.

The revised legislation will make the SVD control strategy clearer, ensuring that it is fit for purpose by targeting pigs only, addressing the lessons learned from recent outbreaks of disease and using the latest scientific knowledge.

7.2.2 The ability to impose movement controls on suspicion or confirmation of disease allows the extent of potential disease spread to be assessed whilst preventing it spreading any further. Current legislation already allows for these movement controls and the revised legislation would not change this. The measures in the draft revised legislation continue to provide benefits in terms of providing the disease control powers for easier containment of the disease, fewer animals to be slaughtered and fewer premises to be placed under restriction. By applying appropriate, more targeted restrictions this allows industry to continue operating where possible during an outbreak.

7.2.3 Movement controls have the potential to impact on producer profits because of increased costs associated with keeping or losing excess stock and lower market prices. Under the draft revised legislation cattle and sheep would no longer be subject to movement controls as a result of SVD related restricted zones being imposed so a benefit would arise in terms of costs avoided for the cattle and sheep sectors.

7.2.4 Social benefits can also be gained as a controlled disease outbreak with a proportionate targeted response limits the stress and psychological trauma on farmers and others in related industries. This includes those whose farms are infected and those who are worried that infection may reach their farm or that controls imposed will adversely affect their business.

7.3 Costs under Option 2 (transpose the Directive)

7.3.1 Unless disease is present there is no economic impact and thus no costs to industry.

7.3.2 Current legislation already imposes costs on businesses in the event of a suspected or confirmed case of SVD and these would continue the same under the draft revised legislation. Costs are difficult to quantify and depend very much on the nature of the outbreak. As well as the cost of the loss of pigs if disease is confirmed and the restriction on movements, there may be costs in housing and isolating pigs, cleansing and disinfecting holdings and additional requirements for biosecurity of vehicles. Controls over a suspect case would be of limited duration, but may nevertheless have some cost impact.

7.3.3 Potential costs for the livestock sector and associated industries incurred due to disease control restrictions being imposed can be demonstrated by referring to costs incurred when implementing current Foot-and-Mouth Disease legislation. ¹³ The draft revised legislation does not add to these and is a significant improvement over the existing controls in terms that it can be seen as providing control measures which are a proportionate response to SVD. The draft revised legislation reduces the costs to businesses operating out with the pig sector, by removing unnecessary controls on them that would otherwise have to be observed under present legislation. Annex 1 provides an overview of the costs of disease control measures during an SVD outbreak. It also estimates the withholding costs that the cattle, sheep and pig sectors faced due to movement controls being imposed during 2007 in response to Foot-and-Mouth Disease in GB. When responding to SVD using the draft revised legislation, withholding costs would only be experienced by the pig sector, with the cattle and sheep sector able to continue with business as usual.

7.3.4 The draft revised legislation maintains the current compensation arrangements as detailed in the Swine Vesicular Disease (Compensation) Order 1972, with compensation payable for healthy animals that are compulsorily slaughtered for disease control purposes. It is not payable for consequential losses or indirect losses to businesses during an outbreak.

7.3.5 As with the existing legislation there are unlikely to be significant costs to consumers. The costs to businesses are not great, and therefore prices are unlikely to rise. Product choice would also remain largely unaffected because supermarkets are likely to counteract any supply shortages by increasing imports.

7.3.6 There will be no costs to the public sector when there are no outbreaks of disease.

7.3.7 The legislation incurs costs for the public sector in a suspected or confirmed case of disease. The legislation can be enforced using existing systems to minimise the administrative burden imposed and annual costs for the different organisations will remain the same. The amount would depend on the nature of the outbreak and the extent that it has spread. The draft revised legislation, fully transposing the Directive, will be easier for public sector staff such as Scottish Government officials, Animal Health and Local Authorities to enforce as it is more streamlined and targeted than the present position of relying on Foot-and-Mouth Disease legislation. There is no significant increase in administrative burdens to the regulators as the legislation will be in one place, easily implemented and easily enforced. In fact this should reduce the administrative burdens, for example, the time spent on serving notices on infected premises will remain the same, but the time spent explaining the policy should reduce.

7.3.8 The government is already committed to expenditure in an outbreak of disease including:

• Payment of compensation for healthy animals that are slaughtered for disease control purposes under the Animal Health Act 1981;

• Slaughtering of animals for disease control purposes and disposal costs for these animals;

• Surveillance and monitoring by Animal Health in the infected area and undertaking epidemiological tracings;

• Administrative costs such as implementing Declarations, running disease control centres and setting up a communications programme;

• Official supervision and monitoring of cleansing and disinfection of premises and vehicles.

8. Small/micro firms impact test

8.1 In the event of a suspected or confirmed outbreak of disease, the proposal will affect small businesses, but to no greater degree than at present. The degree of consultation with representative groups that was undertaken when the Directive was negotiated is unknown, but a full consultation exercise will be undertaken during the consultation process. Small firnms and businesses will be targeted through the organisations consulted as part of this written consultastion exercise.

9. Legal aid impact test

9.1 The proposal does not create new criminal sanctions or civil penalties.

10. Test run of business forms

10.1 Existing forms will remain in use. These have already been tested on businesses.

11. Competition assessment

11.1 The proposals are unlikely to have negative impacts on competition unless disease is confirmed (and even then it will have minimal impact on consumers). The draft revised legislation applies equally to all new and existing businesses and is similar to existing requirements for other serious diseases of livestock.

11.2 The draft revised legislation would be likely to have only a minor impact on competition in the markets directly affected by it, depending on size of outbreak. The major markets affected include the European markets for pig meat as well as markets for the trade in live pigs. Other farm types, such as poultry or sheep holdings, may incur indirect impacts from the draft revised legislation but crucially this will be significantly less than under existing arrangements.

12. Enforcement, sanctions and monitoring

12.1 In the event of a disease outbreak, Animal Health and Local Authorities would enforce the legislation as they do at present; there are no significant new burdens on these enforcement agencies.

12.2 During an outbreak, any additional burdens on the farming industry would, generally, be no greater than under existing legislation.

12.3 The EU Commission has responsibility for monitoring enforcement by member states in order to ensure uniform application of EU legislation .

12.4 The effectiveness of UK enforcement procedures is kept under ongoing review. Any evidence of failure to enforce by other Member States is drawn to the attention of the Commission.

12.5 The penalties for non-compliance are fines of up to £5,000 or 6 months imprisonment.

Annex 1: Overview of costs of disease control measures during a SVD outbreak.

A1 Disease control measures in the event of an outbreak, bring benefits from reducing the risk of spread of disease. Disease control measures however, also result in costs to industry as a result of movement restrictions and biosecurity measures. The cost of control measures during a hypothetical SVD outbreak would depend on the scale and length of the outbreak.

A2 Withholding cost are one of the costs incurred due to movement restrictions, representing feeding costs and productivity losses from keeping larger than expected numbers of animals on farm. For reference, Table 1 provides an estimate of withholding costs associated with movement restrictions in Scotland during the FMD outbreak in 2007. The 2007 FMD outbreak involved a Restricted zone covering the whole of Scotland; a small SVD outbreak would likely involve a much smaller controlled area consisting of a protection and surveillance zone.

A3 Costs of biosecurity measures would also be incurred during a SVD outbreak. Production and market losses may be incurred due to the imposition of movement restrictions. In the event of a SVD outbreak the associated production losses may be limited.

A4 Given a hypothetical SVD outbreak, a comparison of the differences in cost between options considered in this RIA are discussed below:

Option 1: Continue to rely on present controls (Do nothing)

• Cost of movement restrictions and biosecurity measures would be incurred as per use of control measures applicable under existing FMD control legislation.
• Infraction proceedings and costs could be incurred if the obligation to implement EU legislation is not fulfilled.

Option 2: Transpose EU Directive to introduce disease control legislation specific to SVD

• A reduction in cost to some livestock sectors and related industries as control measures on non-susceptible species that are unnecessary for SVD control are removed. Assuming an SVD outbreak would require movement restriction at the same scale as during the autumn 2007 FMD outbreak outlined in Table 1, this streamlined legislation would help avoid costs to the cattle and sheep sectors. Only costs to the pig sector would be incurred under an SVD outbreak.
• Higher costs may be incurred for cleansing and disinfection in infected pig premises due to stricter cleansing and disinfection requirements.

Table 1: Estimated withholding costs due to Scotland wide movement restrictions, FMD outbreak 3 August to 17 October 2007

Source: Foot and Mouth disease review 2007: Economic impact in Scotland.

Notes

1. This table provides an example of the withholding costs of movement restrictions experienced during the 2007 FMD outbreak, with movement restrictions across all Scotland.

2. Withholding costs associated with an SVD outbreak will likely be smaller and will depend on the size and location of any protection and surveillance zone.

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