EVALUATION OF THE EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY AND EGG SECTOR (AGRI-2010-EVAL-04) pptx

Final Report for

European Commission

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Job No2520/BDB/November 2011

EVALUATION OF THE
EXCEPTIONAL MARKET SUPPORT
MEASURES IN THE POULTRY
AND EGG SECTOR
(AGRI-2010-EVAL-04)
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
i

Contents

S1. EXECUTIVE SUMMARY V
1. INTRODUCTION 1
2. DESCRIPTION OF THE AVIAN INFLUENZA OUTBREAK AND ITS IMPACT 3
2.1. THE OUTBREAK OF THE DISEASE OUTSIDE THE EU 3
2.2. THE OUTBREAK OF THE DISEASE INSIDE THE EU 5
2.3. THE PROCESS OF LOSS AND PERCEIVED LOSS OF CONSUMER CONFIDENCE 8
2.3.1. Reasons for the loss of consumer confidence 16
2.4. SUBSEQUENT MARKET DEVELOPMENTS 20
2.4.1. Consumption 20
2.4.2. Prices 22
2.4.3. Production 26
2.4.4. Income 28
2.4.5. Summary of market developments 30
2.4.6. Reasons for subsequent market development 31
2.5. RESPONSE TO THE MARKET DEVELOPMENTS 35
2.5.1. Industry response 35
2.5.2. National response 37
2.5.3. Initial EU response 42
3. THEORETICAL ANALYSIS OF THE EXCEPTIONAL MEASURES 47
3.1. POLICY FRAMEWORK 47

3.2. INTERVENTION LOGIC 49
3.3. THEORETICAL ANALYSIS OF INTERVENTION LOGIC 53
3.4. IMPLEMENTATION OF REGULATION (EC) NO 1010/2006 60
4. THEME 1: MARKET STABILITY 67
4.1. EVALUATION QUESTION 1: TO WHAT EXTENT WERE THE MEASURES EFFECTIVE IN RESTORING MARKET STABILITY IN THE
POULTRY AND EGGS SECTOR? 67
4.1.1. Theoretical analysis 67
4.1.1. Methodology and analytical limitations 67
4.1.2. Evaluation criteria and indicators 68
4.1.3. Criteria 1: the Exceptional Measures were effective in restoring market stability to the poultry sector
69
4.1.4. Criteria 2: the Exceptional Measures were effective in restoring market stability to the egg sector . 83
4.2. EVALUATION QUESTION 2: TO WHAT EXTENT HAVE THE DIFFERENT WAYS OF IMPLEMENTATION OF THE EXCEPTIONAL MARKET
SUPPORT MEASURES IN THE INDIVIDUAL MEMBER STATES INFLUENCED THEIR EFFECTIVENESS IN RESTORING MARKET STABILITY? . 89
4.2.1. Theoretical analysis 89
4.2.2. Methodology and analytical limitations 89
5. THEME 2: INCOME STABILITY 91
5.1. EVALUATION QUESTION 3: TO WHAT EXTENT WERE THE MEASURES EFFECTIVE IN STABILISING INCOME IN THE POULTRY AND
EGGS SECTOR (FARMERS AND DOWNSTREAM)? 91
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
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5.1.1. Theoretical analysis 91
5.1.1. Methodology and analytical limitations 92
5.1.2. Evaluation criteria and indicators 93
5.1.3. Criteria 1: the recovery of income 93
5.1.4. Criteria 2: the Exceptional Measures were effective in stabilising incomes directly through the
compensation provided 99
5.1.5. Criteria 3: the Exceptional Measures were effective in stabilising income indirectly through returning
the market to balance and hence restoring prices 105

5.2. EVALUATION QUESTION 4: TO WHAT EXTENT HAVE THE DIFFERENT WAYS OF IMPLEMENTATION OF THE EXCEPTIONAL
MEASURES IN THE INDIVIDUAL MEMBER STATES INFLUENCED THEIR EFFECTIVENESS IN MAINTAINING INCOME? 106
5.2.1. Theoretical analysis 106
5.2.2. Methodology and analytical limitations 107
5.2.3. Evaluation criteria and indicators 107
5.2.4. Criteria 1: suitability of the measures 108
5.2.5. Criteria 2: Timing of the measures 113
5.2.6. Criteria 3: application procedure and eligibility 117
5.2.7. Criteria 4: payment rates 124
6. THEME 3: EFFICIENCY, RELEVANCE AND COHERENCE 127
6.1. EVALUATION QUESTION 5: TO WHAT EXTENT HAVE THE MARKET DISRUPTIONS BEEN TACKLED EFFICIENTLY? 127
6.1.1. Theoretical analysis 127
6.1.2. Methodology and analytical limitations 128
6.1.3. Evaluation criteria and indicators 129
6.1.4. Criteria 1: the Exceptional Measures were efficient in terms of administrative burden 130
6.1.5. Criteria 2: the Exceptional Measures were efficient in terms of financing method 134
6.1.6. Criteria 3: the impacts arising from the Exceptional Measures in relation to inputs 136
6.2. EVALUATION QUESTION 6: TO WHAT EXTENT WERE THE MEASURES RELEVANT TO FULFIL THE OBJECTIVES OF THE CAP AND TO
CREATE EUROPEAN ADDED VALUE? 139
6.2.1. Theoretical analysis 139
6.2.2. Methodology and analytical limitations 140
6.2.3. Evaluation criteria and indicators 141
6.2.4. Criteria 1: the Exceptional Measures were relevant to the objectives of the CAP 141
6.2.5. Criteria 2: the Exceptional Measures provided EU added value 146
6.2.6. The likely impact of Member States acting alone 147
6.3. EVALUATION QUESTION 7: TO WHAT EXTENT HAVE THE EXCEPTIONAL MARKET SUPPORT MEASURES BEEN COHERENT WITH
OTHER MEASURES? 148
6.3.1. Theoretical analysis 148
6.3.2. Methodology and analytical limitations 149
6.3.3. Evaluation criteria and indicators 149

6.3.4. Criteria 1: the Exceptional Measures were coherent with other EU initiatives undertaken in response
to the 2005/06 AI crisis 150
6.3.5. Criteria 2: the Exceptional Measures were coherent with private initiatives undertaken in response
to the 2005/06 AI crisis 155
6.3.6. Criteria 3: the Exceptional Measures were coherent with national initiatives undertaken in response
to the 2005/06 AI crisis 158
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
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6.4. EVALUATION QUESTION 8: TO WHAT EXTENT WERE THE MEASURES COHERENT WITH THE OVERALL CAP AND CAP REFORMS?
160
6.4.1. Theoretical analysis 160
6.4.2. Methodology and analytical limitations 160
6.4.3. Evaluation criteria and indicators 161
6.4.4. Criteria 1: the Exceptional Measures are coherent with the current CAP 161
6.4.5. Criteria 2: the Exceptional Measures are coherent with the likely direction of future CAP reform 165
7. THEME 4: LESSONS LEARNED 173
7.1. EVALUATION QUESTION 9: WHICH RECOMMENDATIONS CAN BE MADE ON THE BASIS OF THE EXPERIENCE WITH THE
EXCEPTIONAL MARKET SUPPORT MEASURES FOR TACKLING SIMILAR CASES IN FUTURE? 173
7.1.1. Theoretical analysis 173
7.1.2. Methodology and analytical limitations 173
7.1.3. Lessons learned and recommendations 174
8. CONCLUSIONS AND RECOMMENDATIONS 181
8.1. JUDGEMENTS ON THEME 1: MARKET STABILITY 181
8.1.1. Effectiveness of the measures in restoring market stability 181
8.1.2. The impact of implementation on effectiveness in restoring market stability 181
8.2. JUDGEMENTS ON THEME 2: INCOME STABILITY 182
8.2.1. Effectiveness of the measures in stabilising income 182
8.2.2. The impact of implementation on effectiveness in maintaining income 182
8.3. JUDGEMENTS ON THEME 3: EFFICIENCY, RELEVANCE, COHERENCE 184

8.3.1. To what extent have the market disruptions been tackled efficiently 184
8.3.2. To what extent were the measures relevant to fulfil the objectives of the CAP and to create
European added value 184
8.3.3. To what extent were the measures coherent with other measures 185
8.3.4. To what extent were the measures coherent with the overall CAP and CAP reforms 186
8.4. CONCLUSIONS AND RECOMMENDATIONS 188
8.4.1. Conclusions 188
8.4.2. Recommendations 189
9. REFERENCES 191



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S1. Executive Summary
This study evaluates the impact of the exceptional market support measures in the poultry and egg
sectors introduced in 2006 to deal with the market disturbances that originated from fear of Avian
Influenza (AI) and the resulting confidence crisis. Severe market disturbances and a crisis of
confidence occurred despite the absence of the disease among domestic birds in the EU; the crisis
could therefore be considered a perceived crisis of confidence. The consumer fear of AI destabilised
the whole production and trade chain. Data shows that the EU average weighted price of
poultrymeat dropped by 17.3% between August 2005 and March 2006. Production also dropped by
around 12.6% between November 2005 and February 2006, though this figure may have been
affected by seasonality.

Against a background of reduced demand and hence market instability, the industry took measures
to reduce production. Some Member States also introduced national measures to assist the sectors.
At the same time the European Commission increased the scope and rate of export refunds available
within the poultry Common Market Organisation (CMO) to remove excess supply from the EU

market. However, the combination of reduced demand in some Third Countries, and the
introduction of bans on EU poultry and egg products in others following outbreaks of H5N1 within
the EU restricted the impact of these measures on market stability.

Because no regular measures were foreseen for these circumstances in the CMOs, the Commission
amended Article 14 of the poultry and egg CMOs to allow the use of exceptional market support
measures in the event of a drop in consumer confidence. This was the first time that the
Commission had implemented market support measures due to a perceived lack of consumer
confidence. A payment scheme was then established by the Commission in order to reduce supply
and address the market disruption through Regulation (EC) No 1010/2006 which was adopted on
July 3, 2006 and entered into force on May 11, 2006.

The methodology for this evaluation included desk research and analysis; analysis of FADN data;
literature review; online survey of Competent Authorities; interviews with Commission Services and
key EU stakeholders; and, case studies in France, Greece, Hungary, Italy, the Netherlands, Poland and
Spain.
S1.1. Theme 1: Market stability
The Exceptional Measures should have resulted in a reduction in supply of poultry, and to a much
lesser extent, eggs by compensating producers for the removal of breeding stock, hatching eggs, day
old chicks and pullets, and by compensating producers for the resulting lower levels of production.
This reduction in supply should have restored the markets to stability.

The recovery of prices in the poultry market began in March and markets returned to pre-crisis
trends from mid-2006 with the exception of Third Country imports which remained below pre-crisis
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
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levels until mid-2007. This suggests that supply was successfully reduced in the short-term without
affecting the production potential of the EU industry.

However, despite the rapid implementation of the Exceptional Measures, the timing was such that
the industry cannot have made production decisions in late 2005 and early 2006 which reduced
supply in the knowledge that these decisions would subsequently be supported by the EU. It is
therefore only possible to conclude that the Exceptional Measures were not directly effective in
restoring market stability to the poultry sector, although there may have been a rational expectations
effect which had an indirect impact. That said it is possible to infer that had the measures been
known to the industry at the time production decisions were taken, they would have been effective
in reducing supply in combination with the other industry initiatives and national measures
introduced. The Exceptional Measures were therefore correctly specified, but were simply
announced too late.

The Exceptional Measures were used very sparingly in the egg sector, but again the measures were
too late to have had a direct impact, although there may have been a rational expectations effect.

A necessary condition for national implementation of the Exceptional Measures to have had an
impact on effectiveness is that the measures had been effective in restoring market stability. This
could not have been the case directly, although there could have been an indirect impact, because
the industry could not have known whether there would be measures when production decisions to
reduce supply were taken, let alone the form that these measures would ultimately take. Different
national implementation therefore had no impact on the effectiveness of the measures in this respect.
S1.2. Theme 2: Income stability
The Exceptional Measures, while too late to be a causal factor in the recovery of income, still had a
positive impact on income when payments were made. The measures also had a positive impact on
liquidity. Industry figures suggest that income losses throughout the production chain amounted to
between €10 and €650 million depending on Member State during the crisis period, before later
recovering with farmers in non-integrated systems considerably more impacted than those in
integrated systems. In integrated systems it was the integrators who bore the brunt of income losses
as they were committed to supply contracts. In non-integrated systems, the proportion of losses
borne downstream varied, but was generally substantially lower than in integrated systems. The total
support offered under the Exceptional Measures covered up to a third of estimated losses borne by

the production, hatchery and breeding stages of the chain in some Member States, although not all
this support was ultimately taken up.

The range of measures on offer was generally in accordance with what had been requested by the
industry and affected Member States, and hence they provided a suitable mechanism to support
income. Though Commission Services provided a clear set of reasons as to why private storage was
not offered, several stakeholders and Member States regarded its absence as an important omission.

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The main limiting factor in terms of the impact of the measures on income appears to have been the
eligibility criteria. In this regard it is very difficult to differentiate between the impact of EU and
national level criteria (including documentary requirements). While the eligibility criteria may have
had a negative impact on use of the measures in supporting income, it is clear that some kind of
criteria are needed in order that producers who have taken the necessary measures are the
beneficiaries and thereby to avoid deadweight.

It is improbable that the measures had an indirect impact on income through returning the markets
to balance because they did not have a causal impact on either production or prices.

Several aspects of implementation were identified as potentially having an impact on the effectiveness
of the measures. For some of these aspects it can be concluded that they may have impacted
effectiveness, and for others not.

Most Member States chose measures which could theoretically support income at all three points in
the broiler production chain, although this does not ensure that the exact measures chosen were
those requested by the Member State poultry sectors. It is difficult to draw conclusions about the
suitability of measures chosen in Member States with integrated production chains. In Member
States with non-integrated production chains, there is some evidence to suggest that the lack of

coherence between the proportion of losses borne by a part of the chain and the proportion of
money allocated to it had some negative impact on effectiveness for some parts of the production
chain.

Evidence suggests that the timing of implementation and payments in Member States had little direct
impact on the effectiveness of the measures in supporting income at the time. However, this is
partly because, despite rapid implementation by the Commission, the measures were made available
at an EU level some time after the falls in producer income had taken place. As a result, money from
the measures had a greater impact on capacity rebuilding and liquidity than in terms of strictly
compensating for the falls in income dating from late 2005/early 2006. Consequently, given that the
measures were available at EU level some time after the falls in income and took further time to
implement at national level (hence the initial payment period was already significantly late), the
requests for extension to payment periods cannot be considered to have had a further significant
negative impact on the effectiveness of the measures in maintaining income. Indeed in some cases it
allowed Member States to provide support to more beneficiaries.

Some aspects of the application procedure and eligibility criteria at Member State level appear to
have had an impact on effectiveness. Although it is difficult to isolate individual aspects, a common
problem was a short application period, especially in combination with additional national eligibility
criteria. The longer application period and more targeted awareness-raising in Italy and Greece, plus
the ability of associations to complete applications on the behalf of applicants in Greece, may have
positively impacted both take-up and the effectiveness of the measures. Whilst the application
period was short in Hungary, the procedure was considered relatively simple, and assistance in
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
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completing the application was provided, possibly explaining the reasonable level of take-up in
Hungary. In Spain, the close collaboration with the industry appears to have been the key factor in
ensuring the 100% utilisation of funds. Generally it has to be noted that the average up-take rate
across the EU was rather low at 52% of available funds.

The limited evidence on the impact of payment rates suggests that, with a few exceptions, rates
chosen by Member States were appropriate.
S1.3. Theme 3: Efficiency, relevance, coherence
Evidence drawn from our interviews and survey suggests that the administrative burden of the
measures was relatively low (0.2% of EU funds for the Commission and between 0.4% and 9.1% of
Member State funds for national Competent Authorities). This implies that the measures were
efficient in terms of administrative burden. Unfortunately it is not possible to corroborate this by
comparing the implementation costs of the EU level measure to the implementation costs of industry
and national measures due to a lack of data and differences in the nature of the measures.

While it is not possible to reach a decisive judgement on the impact of the financing method (co-
financing, and method of financing the Member State contribution) on efficiency, there is some
evidence to suggest that co-financing may have delayed implementation in some Member States.
That said, co-financing is generally seen as being preferable to solely national financing, although it is
not without issues. There is merit in considering increasing the proportion of EU support in order
to mitigate some of the problems in terms of Member State affordability.

In terms of the relationship between inputs and outputs, evidence suggests that the measures were
efficient. Support provided was a small percentage both of the total output of the poultry sector in
2006 (0.8%) and of estimated total losses (up to 10%). Despite the amount of support being
comparatively small it did allow some producers to avoid bankruptcy and reduced liquidity problems
for others. This implies that significant impacts were achieved with small amounts.

Despite their comparatively fast introduction considering the absence of a legal base, the efficiency of
the measures in this context was perceived to be limited by the issue of timing, though this was more
connected to the lateness of the measures themselves than the lateness of payments under them.
There is evidence to suggest that the measures were too late to help some producers, who had
already made the decision to leave the sector, and were palliative for others.

Finally, connected to the timing issue, the retrospective measures were perceived to correspond to
the actions taken by producers (with the exception of private storage), and were coherent with each
other. The measures can therefore be considered efficient in this respect.

The measures within Regulation (EC) No 1010/2006 were relevant to the needs of the industry at
the time. Support for private storage was considered by the industry and some Competent
Authorities to be a missing measure. While the decision not to use private storage was based on the
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
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fact that the CAP applies only up to the first transformation of products, a lack of cost-effectiveness
and a move away from such measures in the 2003 CAP reform, the existence of support for private
storage in other sectors does suggest that it would have had a role to play in the short-term. The
retroactivity period of the Regulation generally fulfilled industry needs. While eligibility criteria may
have imposed some restrictions on the relevance of the measures, it is difficult to differentiate
between the general impact of EU and specific national level eligibility criteria. Furthermore it is
recognised that criteria were necessary to effectively target support to recipients who had taken
action to reduce production.

With regard to the objectives of the CAP, the measures were both theoretically and practically
relevant for the objective of ensuring a fair standard of living for farmers. The measures were
theoretically relevant for the objective of stabilising markets during the crisis, though in practice they
were not directly relevant due to the timing issue. However, because the action taken by farmers
and later compensated for by the Exceptional Measures did work to stabilise the markets, it is clear
that the measures would have been relevant had they been available in time to influence production
decisions. As it was the measures were effective in ensuring the stability of the markets during the
recovery phase. Similarly with regard to the objectives of assuring the availability of supplies and
reasonable consumer prices, the actions taken by producers and later compensated for by the
Exceptional Measures were relevant.

With regard to the EU added value of the measures, an EU level response was appropriate given the
EU-wide nature of the crisis. The menu method generally allowed a co-ordinated response while
giving the Member States freedom to select appropriate measures, and this ultimately ensured that
the response was more effective than if Member States had acted alone. The EU level response also
avoided both the potential problem of compliance with State Aid rules and the potential for unfair
competition between Member States. That said, it should be noted that differing ability/willingness to
provide co-financing was itself a problem.

While the EU level response was generally appropriate, timing was problematic. Providing a
coordinated response required considerable time, and it would have been quicker had Member
States acted alone as was seen in, for example, France and Greece. This was indeed corroborated by
experiences in certain Member States such as Italy and Greece. It is also possible that the menu
system, while providing Member States with choice, may have also reduced the degree of
coordination where Member States chose to implement only a small proportion of the measures.
However, one of the main achievements of the measures was that they avoided disturbance of the
internal market through a co-ordinated EU level response, while maintaining long-term production
capacity.

Veterinary/preventative measures under which the EU sought to limit the extent of AI in the EU,
were successful in that the impact of the disease on animal and human health was limited and
consumer confidence was therefore protected from potential further decline. The Exceptional
Measures are judged to have been coherent with the veterinary/preventative measures in that they
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
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built on this first round protection and addressed the market consequences of the decline in
consumer confidence.

Although in practice export refunds were unable to remove excess supply from the EU market, the
Exceptional Measures were coherent in that while export refunds targeted existing surplus

production, Exceptional Measures were used to prevent future production adding to this surplus.
However, the absence of a mechanism to directly address the existing surplus within the Exceptional
Measures reduced the degree of coherence somewhat.

The amendment of the agricultural products Regulation by Regulation (EC) No 1022/2006 added a
provision to allow the promotion of conventional poultry meat products as a direct consequence of
the decline in consumer confidence. The Exceptional Measures were coherent with this promotion
initiative in that they addressed the supply-side of the problem through decreasing production while
Regulation (EC) No 1022/2006 addressed the demand-side of the problem by allowing initiatives to
boost consumption.

However, our analysis of communication undertaken at the time of the AI crisis reveals that this did
not help to alleviate consumer concerns and therefore did not help to rebuild consumer confidence.
There was therefore little coherence with the Exceptional Measures. That said, it is clear that the
incoherence stemmed solely from the communication side.

Largely because the Exceptional Measures provide retrospective support for measure already taken
by the industry there is a high degree of coherence between them. The only aspect of incoherence
was the absence of support for storage measures or another mechanism to remove immediate
supply. Even in this case the fact that the industry did freeze and store poultry meat, or look for
alternative outlets, meant that together industry actions and Exceptional Measures provided a
coherent response.

Most Member States did not implement national measures in response to the 2005/06 AI crisis.
However, where they were used (mainly in France, where they were financially substantial, and
Greece) national measures tended to focus more on communication and on supporting income to
assist the maintenance of future production potential. The Exceptional Measures were therefore
coherent with this wider approach beyond reductions in production. The fact that national measures
were not widely used, and that the measures which were used differed, can be considered an
argument for a Community level response to avoid the potential for unfair competition.

The Exceptional Measures are therefore judged to have been generally coherent with other
measures taken to address the 2005/06 AI crisis at the EU, national and industry levels.

It has been concluded that the measures were relevant to the objectives of the CAP. Using the
definitions of “relevance” and “coherence” from the terms of reference, it can be concluded that as
the measures were relevant, they were also coherent. Three further coherences with CAP
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
xi

principles were also identified: the focus up to the first point of transformation; compensation for the
higher costs of EU production during a crisis; and, the solidarity principle in financing. One
incoherence, the use of such measures in an otherwise light CMO, was also identified.

Exceptional Measures were considered to be an effective instrument for a crisis, however, there is
currently no definition of “crisis” or “exceptional”. In taking a safety net approach and using such
measures, definitions could be useful, as would be sufficient data to enable market monitoring. The
absence of communication measures from Regulation (EC) No 1010/2006 is considered coherent
with the CAP.

Some issues of coherence with wider EU objectives were identified. The Exceptional Measures were
not considered incoherent with EU animal welfare policy, as the definition of animal welfare focuses
on respecting the sentience of animals rather than ethical issues per se. However, it should be noted
that the motivation presented for the measures and the nature of the measures themselves could
play a role in their acceptance. From an animal welfare point of view, if such measures were to be
taken again it would be important that a suitable contingency plan is in place (in accordance with
Regulation (EC) No 1099/2009) so that the sentience of animals be respected at the time of
slaughter. With regard to trade, Exceptional Measures are not popular with trade partners (and in
the case of consumer subsidies, they are unpopular with some Member States as well). More
widespread use of similar measures would require the EU to do what it could to follow WTO rules.

DG Trade would have to be involved in the comitology process if such measures were considered
likely to have a trade impact. Finally, there is currently incoherence across sectors due to the
existence of measures or legal bases in some sectors and their absence in others.

Past reforms to the CAP have led to a more market orientated approach which places greater
responsibility on the producer to manage risk. The use of Exceptional Measures as a safety net is
considered coherent with this change in emphasis. However, the timing of the measures limited the
ability of producers to self-regulate and caused the measures to be palliative rather than preventative
(the reverse of other Pillar 1 measures).

The Lisbon Treaty has changed the way in which the Commission adopts implementing legislation;
this in turn will change the way in which the Commission could introduce Exceptional Measures in a
future crisis. It follows from this evaluation that speed and flexibility are key.
S1.4. Conclusions and recommendations
S1.4.1. Conclusions
The markets recovered from the 2005/06 AI crisis by mid-2006. This recovery was partly based on
the actions taken by the industry from late 2005 onwards, which, in the case of actions to reduce
future production began to have an impact in early 2006, and was also influenced by the national
measures introduced in the minority of Member States that did so. However, the proximate cause
of recovery was most likely the reduction of media interest in the AI story which allowed consumer
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xii

confidence in poultry meat to return. The Exceptional Measures, which provided retrospective
support for the actions taken by the industry to reduce production, were highly relevant to needs,
and would in theory have played an important role in returning the market to stability. However,
the Exceptional Measures were not announced until July 2006 and the earliest that the industry could
reasonably have been aware of the exact detail of the measures was June 2006 following discussions
on the draft Regulation. Given that the recovery started in March 2006, it is therefore impossible to
conclude that the Exceptional Measures had a direct causal impact in terms of returning the markets

to stability, although the expectation that the Commission was to provide some form of assistance
may have had an indirect impact.

Payments under the Exceptional Measures were made from late September 2006 to the end of May
2007, with the main payment period falling in late 2006/early 2007. Payments were therefore made
too late to be a direct causal factor in the recovery of income, although again the expectation of
some form of support may have been indirectly beneficial. However, the support did have a clear
positive impact on income when the payments were made and this would have assisted producers in
meeting rising demand as consumer confidence returned.

Clearly there were some substantial delays between the publication of Regulation (EC) No
1010/2006 in July 2006 and release of funds and this stems from the requirement for Member States
to implement and administer the measures. However, given that the payments would already have
fallen after the period of immediate crisis even if payments had been instantaneous on publication of
the Regulation, this is not considered to be significant.

The administrative burden of the Exceptional Measures was low for both the European Commission
and the Member States, though the burden on beneficiaries was variable depending on the
documentary requirements imposed by Member States. Although the amount of support disbursed
was relatively small, the impact in terms of boosting income was considered useful and helped to
maintain the EU production base. That said, efficiency was obviously compromised by the fact that
the measures came to late to have had a causal impact on production-reducing decisions.

The Exceptional Measures were highly relevant to the needs of the industry and were relevant to the
CAP objectives of maintaining a fair standard of living for producers and assuring the availability of
supplies/reasonable prices for consumers in the post-crisis recovery period. Had the measures been
available in time, they would also have been relevant to the CAP objective of stabilising the market
during the crisis; as it was, they were effective in ensuring the stability of markets during the recovery
phase. The measures were also relevant to the TFEU objective of maintaining the internal market
(Article 38). European added value was created through acting in a coordinated fashion while the

subsidiarity principle was respected by allowing Member States to choose which measures, if any,
they wanted to implement.

The Exceptional Measures were coherent with other measures taken at the EU level, including
veterinary/preventative measures, promotional initiatives and the use of export refunds. Coherence
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
xiii

with respect to export refunds was reduced somewhat by the absence of short-term support for a
private storage measure. The main failing in response to the crisis was an incoherent and at times
unhelpful approach to communication.

Coherence with industry actions was high because the Exceptional Measures were based on the
industry response, as was coherence with national measures where these were used which tended to
focus on more general means of supporting income rather than specifically on measures to reduce
production.

Finally, the Exceptional Measures were considered to have been coherent with the CAP in that they
focused on the production chain up to the first point of transformation, provided compensation for
higher costs of EU production during a crisis and adhered to the solidarity principle through the use
of co-financing. The Exceptional Measures also fitted well within the general direction of CAP
reform in that they acted as a safety net for producers specifically affected by the crisis rather than as
a more structural general intervention.
S1.4.2. Recommendations
The Commission should give serious consideration to the issue of timing in order to assure the
speedy deployment of future exceptional measures, more specifically: (1) to whether the
decision to take action and the background work can be further streamlined; (2) to whether
legal bases can be introduced during “peace time” to avoid delays during crises; and, (3) the
quickest way in which measures could be introduced within the framework of the decision
process under Articles 290 and 291 of the Lisbon Treaty.

Any future use of Exceptional Measures should be harmonised by specifying the implementing
procedure very carefully in the Regulation in order to minimise the mechanisms or regulatory
processes that Member States have to add themselves. Consideration should be given to
whether implementing rules should be specified individually by Member State to ensure that
differences in the legislative environment can be addressed.
The industry should be fully consulted on the adequacy of policy response and method of
implementation.
The use of additional eligibility criteria and overly stringent documentation requirements should
be discouraged.
In any future use of similar measures Member States should be encouraged to promote their
availability through channels which intended beneficiaries might reasonably be expected to be
aware of and to facilitate the submission of applications through simple procedures and
appropriate application windows.
Consideration should be given to increasing the proportion of EU funding in order to reduce
the risk that some Member States will be reluctant to provide co-financing.
A common approach at the EU level should be aimed for in any future crisis to avoid distortions
of the Internal Market.
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
xiv

The menu approach in which Member States can choose the most appropriate measures from a
fixed EU menu should be considered in any future use of Exceptional Measures.
In any future crisis great attention should be paid to communications to ensure that they are
well-founded, scientifically sound, presented in language suitable for citizens and that they avoid
exacerbating loss of consumer confidence.
Promotional measures should be offered by the EU to help with the recovery of demand
following a crisis, and awareness of the availability of these measures among Member States and
the industry should be raised. The Commission should also give thought to how promotional
measure can be introduced quickly, for example through including a provision for sectors exiting
a crisis in the promotion regulation.

Consideration should be given during the CAP reform process to including the provision to take
exceptional measures across all commodity regimes and agricultural sectors.
The Commission should carry out a review of data availability in the agricultural sector against
internal monitoring and potential evaluation needs.
If similar measures are to be used in the future, contemporary and suitable high frequency data
on consumption should be obtained by the Commission to ensure that these are available for
evaluations which may take place some years later.
Data on production, stocks and income should be collected through the inclusion of agriculture
in the monthly EC Business and Consumers Survey.
Consideration should be given to how similar crises can be effectively tackled in the future by
considering the above recommendations and their interactions in order to ensure the correct
preparation for future crises across all sectors.













EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
1

1. Introduction
This study evaluates the impact of the exceptional market support measures in the poultry and egg

sectors introduced in 2006 to deal with the market disturbances that originated from fear of Avian
Influenza and the resulting confidence crisis. Severe market disturbances and a crisis of confidence
occurred despite the absence of the disease among domestic birds in the EU. In some Member
States, for example, Italy, the consumption of whole chicken decreased drastically in the period
between November 2005 and March 2006. The consumer fear of Avian Influenza destabilised the
whole production and trade chain. Exceptional Measures were taken because no regular measures
were foreseen for these circumstances in the Common Market Organisations (CMOs).

The H5N1 strain of the Avian Influenza virus originated in south-east Asia in 2003 and spread across
the continent of Asia, finally reaching the EU borders (Turkey and Romania) in October 2005. In
February 2006, the first outbreaks of the H5N1 virus were reported on EU territory – firstly among
wild birds, and later only sporadic cases among domestic poultry.

The virus was being discussed in the European media before the H5N1 strain arrived in countries
bordering the EU and outbreaks were reported in neighbouring Romania and Turkey in October
2005, media coverage increased. Inconclusive statements about the risks of the H5N1 strain were
widely reported in the media and caused a degree of confusion among consumers. The outbreaks in
neighbouring countries, the media coverage and inconclusive statements on food safety affected
consumer confidence and consumption of poultry meat and (to a lesser extent) egg products
declined in some Member States. Although consumer confidence recovered to some extent towards
the end of 2005, outbreaks in the EU itself in February 2006 once more affected consumer
confidence and the consumption of poultry (and again to a lesser extent) egg products declined once
more.

Against this background of reduced demand (and hence market instability), the industry took
measures to reduce production. Some Member States, for example, France, also introduced national
measures to assist poultry and egg producers. At the same time the European Commission
increased the scope and payment of export refunds available within the poultry CMO to remove
excess supply from the EU market. However, the combination of reduced demand in Third
Countries, and the introduction of bans on EU poultry and egg products by some Third Countries

following outbreaks of H5N1 within the EU restricted the impact of these measures on market
stability.

In order to address the problem of falling demand and oversupply, additional, coordinated measures
were needed at the EU level. However, the CMOs for poultry and eggs were not originally drafted
with provision to permit exceptional market support measures to be taken in the event of a sharp
decline in consumer confidence.

EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
2

The Commission therefore proposed legislation to amend Article 14 of the poultry and egg CMOs
(Council Regulation (EC) No 679/2006) to allow the use of exceptional market support measures in
the event of a drop in consumer confidence. This was the first time that the Commission had
implemented market support measures due to a perceived lack of consumer confidence. A payment
scheme was then established by the Commission in order to reduce supply and address the market
disruption through Regulation (EC) No 1010/2006 which was adopted on July 3, 2006 and entered
into force on May 11, 2006.

This evaluation was carried out by Agra CEAS Consulting, in conjunction with LEI Wageningen,
between December 2010 and July 2011. The methodology included desk research and analysis;
analysis of FADN data; literature review; online survey of Competent Authorities; exploratory and
depth interviews with Commission Services and key EU stakeholders; and, case studies in France
(Pascale Magdelaine, ITAVI), Greece (Professor Sophia Efstratoglou and Dr Athanasios Pappas,
Agricultural University of Athens), Hungary (Dr Levente Nyárs, Agricultural Economics Research
Institute), Italy (Dr Alberico Loi and Dr Enrica Gentile, Areté srl), the Netherlands (LEI Wageningen),
Poland (Dr Grzegorz Dybowski and Dr Mira Kobuszynska) and Spain (Agra CEAS Consulting).

This Preliminary Final Report is structured as follows.
Chapter 2 provides a description of the Avian Influenza outbreak, its impact and measures taken

to deal with the subsequent market developments.
Chapter 3 provides a theoretical analysis of Regulation (EC) No 1010/2006 including its place
within the wider policy framework and the intervention logic. This Chapter also sets out the
implementation of Regulation (EC) No 1010/2006.
The Evaluation Questions specified in the terms of reference are grouped under four evaluation
themes. The first is concerned with market stability (Chapter 4), the second with income
stability (Chapter 1), the third with efficiency, relevance and coherence (Chapter 6) with the
fourth encompassing lessons learned (Chapter 7).
Conclusions and recommendations are offered in Chapter 8.



EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
3

2. Description of the Avian Influenza outbreak and its impact
This Chapter describes the outbreak of the disease outside the EU (section 2.1) and the outbreak
within the EU (section 2.2). It then charts the process of the loss of consumer confidence (section
2.3) and the subsequent market developments (section 2.4). Finally, the industry, national and initial
EU response to the market developments is elaborated (section 2.5). This Chapter therefore sets
the scene for the introduction of the Exceptional Measures.
2.1. The outbreak of the disease outside the EU
The spread of the H5N1 strain of the Avian Influenza virus originated in south east Asia in 2003 and
began its spread to Europe in 2005 (European Commission, 2006c).

Figure 2.1 shows that between December 2003 and February 2004 eight countries in East and
Southeast Asia reported outbreaks of highly pathogenic Avian Influenza. On December 16, 2003,
South Korea became the first country to report two outbreaks of Avian Influenza A (H5N1) in
domestic poultry. Two subsequent outbreaks of the H5N1 virus were reported in separate
southern regions of Vietnam (January 8, 2004), one on a single farm in Japan (January 12), one in

Thailand (January 23), and also in Cambodia (January 24). On January 27, five outbreaks were
confirmed in the Guangxi Zhuang Autonomous Region of China and one in Laos, while on February
2, 127 outbreaks were reported in domestic poultry in Indonesia. Despite control measures, reports
of H5N1 infections continued with Malaysia reporting an outbreak in a flock of domestic chickens on
August 19. By the end of 2005, nine countries were affected by the H5N1 virus.

Outbreaks in migratory birds were reported in western regions of China in 2005 and the spread of
the H5N1 strain continued into Russia (23 July, 2005), making this the first European country to
report a discovery of H5N1 infection in domestic poultry. Subsequently, an outbreak was reported
in domestic poultry in Kazakhstan (July 29), and 89 migratory birds were found dead as a result of
H5N1 in two northern regions of Mongolia (August 10). From October 2005 the virus spread
further west and discoveries of H5N1 infections were reported in poultry in Turkey (October 6),
Romania (October 7) and Ukraine (December 2) and the virus was isolated from wild swans in a
laboratory in Croatia (October 21).

The first humans to be affected by Avian Influenza H5N1 were in Hong Kong in 1997, with another
two human cases in the same city in February 2003. Subsequent transmissions to humans were
confirmed in Vietnam and Thailand in January 2004. As of December 2008 there were 391 human
cases of H5N1 Avian Influenza reported from fifteen countries including Azerbaijan, Bangladesh,
Cambodia, China, Djibouti, Egypt, Indonesia, Iraq, Laos, Myanmar, Nigeria, Pakistan, Thailand, Turkey
and Vietnam (WHO, 2008).



EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
4

Figure 2.1: Spread of Avian Influenza outside the EU 2003-05
Source: World Organisation for Animal Health (2003-05) Disease Information weekly publication.
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR

5
2.2. The outbreak of the disease inside the EU
Figure 2.2 presents the evolution of first confirmed outbreaks of Avian Influenza within the EU
borders in 2006. Table 2.1 presents the total number of outbreaks and the date of the last
confirmed outbreak by Member State. In February 2006 the H5N1 virus reached the EU. The first
outbreak occurred in wild swans in Central Macedonia-Greece (February, 9, 2006). In less than ten
days, wild birds were found to be infected in five Member States:
five outbreaks in wild mute swans were confirmed in Southern Italy (February 11);
one in Slovenia (February, 12);
two on the German Island of Rügen (February, 14);
one in France (February 17); and,
one in Austria (February, 18).

Further H5N1 infections in wild birds were subsequently reported in the Slovak Republic (February
20), Hungary (February 21), Poland (March 6), Denmark (March 14), Sweden (March 15), the Czech
Republic (March 27) and the United Kingdom (April 6). Although there was a continuous decline in
the number of cases from April 2006, the virus was later confirmed in a great crested grebe in Spain
(July 7).

The virus affected domestic poultry in five Member States. Outbreaks in domestic poultry occurred
more than four months after Member States had first communicated sharp falls in consumption of
poultry meat (on 19 October 2005) following outbreaks in wild birds in Turkey and Romania; these
falls in consumption were between 10% and 50% (Table 2.2). As a result of the first sharp falls in
consumption, the industry tabled a request in the EU advisory group of 24 October 2005 for actions
to be taken such as storage assistance and communication campaigns. Belgium informed the
Commission that that some Third Countries were closing their borders to EU poultry meat on 16
November 2005.

France was the first country to find an outbreak of H5N1 in a commercial flock on February 26,
2006. Sweden confirmed its first outbreak in a game bird on March 17. Subsequent outbreaks were

reported among domestic poultry on a single turkey farm in Germany (April 5), in backyard poultry
in Denmark (May 18) and on a single farm in Hungary (June 9). As of the end of 2006, 491 cases of
Avian Influenza H5N1 were reported across fourteen Member States. In 2006, Germany reported
the highest number of outbreaks in wild birds while the majority of the H5N1 outbreaks in domestic
poultry occurred in Hungary. An analysis of the EU situation in 2008 and 2009 indicates fewer
outbreaks of highly pathogenic Avian Influenza and fewer infected countries compared to the same
period in 2006 and 2007.
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
6
Table 2.1: Total outbreaks of H5N1 Avian Influenza and date of first and last confirmed
outbreak (2007-2009) in EU Member States

2006
2007
2008
2009

Wild
Domestic
Wild
Domestic
Wild
Domestic
Wild
Domestic
AT
46; 14/02 -
02/05/06

CZ
14; 29/03 -
22/05/06

1
28/06/07
4; 21/06 -
11/07/07




DE
221;
16/02-
03/08/06
1
05/04/06
227;
16/02-
03/08/07
6; 06/07 -
25/12/07

1

10/10/08
1
06/03/09

DK
26; 14/03 -
26/05/06
1
18/05/06






EL
25; 09/02 -
22/03/06







ES
1;
07/07/06

1*
11/10/09
FR
21; 17/02 -
25/04/06
1
25/02/06
3; 04/07 -
14/08/07





HU
12; 15/02 -
13/03/06
29; 09/06 -
13/07/06
2
25/08/07
2; 24/01 -
31/01/07

IT
19; 11/02-
25/03/06







PL
29; 04/03 -
07/05/06

1
11/12/07
9; 01/12 -
22/12/07




SL
28; 16/02 -
22/03/06

SK
2; 12/02 -
24/02/06







UK
1;
06/04/06


3; 03/02 -
19/11/07
7; 10/01 -
29/02/08
1 *
04/06/08


SE
13; 03/03 -
21/04/06
1

17/03/06






EU-
25
458
33
233
24
7
2
1
1
RO**
10; 22/02 -
31/03/06
172;
13/01-
10/06/06

1
28/11/07

BG**
4; 11/03 -
27/02/06







Total
472
205
233
25
7
2
1
1
*: there are two outbreaks not caused by the H5N1 Asiatic strain (2009 ES and 2008 UK).
** Bulgaria and Romania joined the EU in 2007. It should be noted that there were already outbreaks in Romania in 2005
(13/10-27/12/2005; 27 outbreaks).
Source: European Commission (Animal Disease Notification System); OIE; DG SANCO AI Chronology


EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
7

Figure 2.2: Spread of Avian Influenza inside the EU 2006
Source: World Organisation for Animal Health (2006) Disease Information weekly publication.

EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
8
2.3. The process of loss and perceived loss of consumer confidence
Consumer confidence, and the fear of loss of consumer confidence in the production and trade
chain, played a key role in the market disturbances that the exceptional market support measures
aimed to address.

The best way to present the loss of consumer confidence is through a timeline which shows the main
events and the impact that these were reported to have had. This provides the context within which
the Exceptional Measures were introduced and for the period for which they were eligible. The
composite timeline below (Table 2.2) has been developed based on various sources including: our
exploratory interviews, contemporary newspaper reports, official statements, press releases and
relevant literature. It should be noted that while this timeline brings together key evidence identified,
it is not designed to be an exhaustive inventory of actions and reactions. It should also be noted that
poultry meat was affected far more than the egg sector and where we refer to decreases in
consumption this relates mainly to the poultry meat sector. Finally, not all reductions in
consumption and prices set out below are seasonally adjusted and, as section 2.4 goes on to show,
there is a seasonal component in both the poultry meat and egg sectors.

Based on the timeline developed, the crisis of confidence can be broken down into four broad phases
as set out below:
Phase 1:
Media discussions of Avian Influenza have limited effect on consumer
confidence (before October 2005). During this period, Avian Influenza was not
widely present in countries close to the EU. There were various discussions about
Avian Influenza, but these were more focused on the prevention of spread, and
veterinary measures and some preventative measures were being taken. There was little
media reference to a crisis of confidence, although according to the Italian poultry
association, consumption in Italy started to drop in August.
Phase 2:

First crisis of consumer confidence (October 2005). Avian Influenza reached
several countries which border the EU, but remained outside the Community. Poultry
consumption fell considerably in several EU countries. Media commentary on Avian
Influenza was intensive, and the media considered EFSA’s statement regarding the risk of
contraction of Avian Influenza from poultry or eggs to be inconclusive. Restrictions
were placed on imports into the EU, and veterinary/preventive measures were taken.
Phase 3:
Interim recovery (November-December 2005). The crisis of confidence receded
and consumption recovered to various extents depending on the Member State. Media
commentary on Avian Influenza became less widespread. Preventive measures and
restrictions on imports remained in place.
Phase 4:
Second crisis of confidence (January 2006-July 2006). The second crisis of
confidence can be broken down into three sub-phases:

Beginning (January 2006). Human deaths from Avian Influenza were reported in
Turkey. European media coverage increased and there were notable decreases in
consumption in some Member States. In some cases consumption later recovered
EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
9
towards the end of the month.

Intensification (February 2006). Avian Influenza in wild birds reached EU territory.
Decreases in consumption of varying magnitudes were reported in most Member
States. The magnitude of decreases in consumption was generally greater than those
in the first crisis of confidence. Media coverage was intensive. Italy and Greece,
along with the support of 11 other Member States, requested assistance from the
Commission.

Start of recovery (March-July 2006). Consumption levels remained significantly

below normal in many Member States, but were generally not as low as in February
and were generally starting to recover. Media coverage began to decline.

EXCEPTIONAL MARKET SUPPORT MEASURES IN THE POULTRY & EGGS SECTOR
10
Table 2.2: Timeline of events and loss of consumer confidence
Month, outbreaks and events
Impact, reaction
Phase 1: Limited effects
July – September 2005
On 23 July Russia is the first neighbouring country
to confirm H5N1 AI outbreaks (3) in domestic
poultry.
On 29 July Kazakhstan reports its first outbreak
of H5N1 in domestic poultry.
On 10 August Mongolia confirms its first
outbreaks of H5N1 (2) in wild birds.
On 26 August an EU expert group meets and makes several recommendations, including communication with consumers
to avoid loss of confidence (Finfacts 2005).
In Germany, states fail to agree on emergency measures which would ban outdoor holdings. In September, some German
states introduce a ban independently
1
(USDA 2005a).
According to the Italian poultry association, consumption in Italy starts to fall in August (AVEC 2006). According to the
Italian farmers union, poultry consumption falls 20% during August and September (Les Echos 2005).
On 22 September EU Member State Chief Veterinary Officers and Chief Medical Officers meet in Brussels to
discuss Avian Influenza and Influenza Pandemic Preparedness Planning (USDA, 2005h).
Phase 2: First crisis of confidence
October 2005
On 6 October Turkey reports its first outbreak

of H5N1 in domestic poultry. The Commission
adopts an urgent safeguard Decision
(2005/705/EC) for Turkey suspending imports of
birds and products for which Turkey is authorised.
On 7 October Romania reports its first outbreak
in domestic poultry. The Commission adopts a
Decision (2005/710/EC) for Romania, suspending
imports of birds and products for which Romania
is authorised.
On 21 October Croatia reports its first outbreak
in wild birds.
By mid-October there is a 10% fall in the volume of poultry sales at Rungis wholesale market in France according to the
French wholesale federation. This fall later increases to between 15% and 20% (TF1 2005a, 2005b). According to a
statement from the French poultry association, poultry sales have fallen by 10% across France (Food Production Daily,
2005a). Poultry is selling at 20-30 cents per kg cheaper than the normal price of around €3, and there are concerns about
the upcoming Christmas season (TF1 2005a).
The poultry industry in Spain says that consumption has fallen 10%. The industry starts stockpiling meat: 5,000 tonnes in
the last week of October (El Mundo, 2005a).
Initially there are media comments in the UK that consumers may want to reduce poultry and egg consumption (BBC,
2005). However retailers later report that consumption has not changed. The industry takes preventive action in its
sourcing policy
2
(Food Production Daily 2005c, Food and Drink Europe 2005a, 2005b).
There is a lot of discussion about AI in the media in Germany following the outbreaks in Turkey, but the discussions focus
on possible airborne transmission to humans and vaccinations rather than transmission through consumption. According to
the German poultry association, consumption drops by between 20% and 25% (AVEC 2006).
According to a Greek newspaper, consumption of poultry in Greece falls by 40% in one week (Food Production Daily
2005a). According to the USDA, consumption falls by 55% in October (USDA 2006f). The Greek poultry association
reports that consumption fell by up to 80% (AVEC 2006).
According to the Italian farmers’ association, consumption in Italy falls by 33% (Xinhua 2005a). AVEC later reports a 30-

40% fall. The farmers’ union reports a 40% fall in price (Food Production Daily, 2005b).

1
Lower Saxony and North Rhine Westphalia. Lower Saxony was more at risk due to the fact it is on a migratory route and is a main poultry producing region.
2
One example is the sourcing of local poultry rather than imported.