2010

Michael Seals MBE - Chairman

Farms 250 acres arable and South Devon pedigree herd in South Derbyshire. Director England NFSCo. Director East Midlands

Development Agency. Chairman NROSO. Past Council Member NFU and Committee Chairman.

Ian Campbell MBE - Director Intensive Sector (Pigs)

Retired Regional Manager of the National Pig Association. Director of Unitron UK Ltd.

Nigel Joice - Director Intensive Sector (Poultry)

Farms 285 acres of cereals in North Norfolk, main enterprise is 840,000 poultry unit producing meat birds for supermarkets.

Vice chair of NFU Poultry Board, member of Technical Advisory Committee to the Assured Chicken Production Scheme.

Neil Leach - Director

DEFRA Head of the Animal by–products Unit, with responsibility for advising on Government policy on animal by–products,

including the disposal of fallen stock. Responsible for developing the National Fallen Stock Scheme and a Director of NFSCo

since its creation in 2003.

Ian Duncan Millar MBE - Scottish Director

Farms a 300-acre mixed farm and a hill unit near Aberfeldy in Perthshire. Director of the Moredun Research Institute. Director

of the Highland Glen Lamb marketing group. Chairman of the Beef and Sheep Farm Assurance in Scotland until 2002.

Walter Elliott OBE - Northern Irish Director

Farms 160-acres in the less favoured area near Aughnacloy, Co Tyrone. Member of the UFU Executive. Chairman of the UFU

subsidiary company - Countryside Services. Fellow of the Royal Agriculture Society

Eifion Evans - Welsh Director

Retired practising veterinary surgeon in North West Wales. Former President of the British Veterinary Association.

The Board

Chairman’s Report

This year was another year of solid progress for NFSCo,

with some significant milestones reached. In future we

may look back on the year as being the turning point

when NFSCo evolved from being a company dedicated solely

to the business of fallen stock collection and administration,

to one where we started in earnest to diversify into other

areas, for the good of both NFSCo, collectors and our farmer

members. Our Farm Buyer joint venture with Anglia Farmer,

which offers a range of farming inputs for our members, is

evidence of that.

Our ambition for NFSCo is reflected in our new mission

statement: “We are an established Community Interest

Company focused on the agricultural industry. We utilise our

unique model to provide cost effective delivery of a wide

range of services to the farming community. Our motivated

and ambitious team consists of experts from across the

industry whose wide range of experience and skills ensure

we deliver appropriate solutions for today and develop new

opportunities to improve our industry for tomorrow.”

We believe there are many areas of agriculture that could

benefit from the NFSCo model. At the heart of it is CHOICE.

We believe it is for the farmer to choose his or her service

provider, and our model supports this through a mechanism

that injects true competition into the market, whilst also

allowing for Government support. It creates fair, transparent

and competitive pricing, and facilitates new entrants in the

sector who, through the confidential closed tendering

process, can hit the ground running.

Our quest to diversify into other areas is with just one

objective in mind - to continue to serve our membership with

new services, which provides the farmer with choice and

competition through exposing prices.

We are proud to be associated with

professional, effective and efficient

collection services for fallen stock

collection throughout the UK. We do not

believe that continually squeezing

collector’s prices to the bone is anything

other than counterproductive, as this would affect the quality

of service and ultimately drive collectors out of business, thus

reducing competition and choice.

NFSCo, remember, is a Community Interest Company so our

success is to everyone’s benefit, not just ours!

We are, therefore, well set for the future, and poised to move

forward quickly when the right opportunities arise. My thanks

go to everyone within NFSCo for making it happen in 2010,

and for positioning us so well for 2011 and beyond.

Board meetings

During the year NFSCo held four Board meetings throughout

the UK.

Liaison with Government

Throughout 2010 NFSCo continued to build on our excellent

working relationship with DEFRA officials, and the leaders of

the new Coalition Government, plus the respected devolved

Governments. Our work included:

� Writing to Jim Paice,MP, Secretary of State for DEFRA ,

stating that NFSCo was “ready and willing” to engage with

Government and was open minded to expanding the

NFSCo model into other areas;

� Writing to the Rt Hon George Osbourne, Caroline Spelman

and Jim Paice MP, with suggestions for public expenditure

savings;

� Writing a proposal document for how money could be

saved on BSE testing for Over 48 month old animals;

� Writing a proposal document to improve the efficiency

and effectiveness of Bovine TB surveillance and testing;

� Meeting with farm industry leaders, collectors, renderers

and politicians and civil servants from across the UK;

� Continuing to engage strongly on the arguments

surrounding cost and responsibility.

On the 20 October a group of DEFRA officials visited our offices

at Ashbourne for discussions on many of those issues, and to

see the NFSCo model in operation.

Liaison with Stakeholders

On 2 June NFSCo held its first collector conference at the Hotel

Miraj in Ashbourne. Some 21 collectors , plus four out of six

GB category 1 Renderers, attended. Our speakers included

Jackie Price, from The Welsh Assembly, speaking on

“Compliance with the Animal By-product legislation in Wales”;

Neil Leach on “Changes to Animal By- Product legislation” and

Ian Potter on “Sheep EID and the fallen stock sector”, and

“How NFSCo works for collectors”.

The issue of compliance with the Animal By-Product legislation,

and the fact that there are still several incidences of breaches

of the legislation that go undetected and unpunished each

year, was a particularly hotly debated subject.

After the conference several delegates visited the offices and

met the administration staff at Ian Potter Associates.

NFSCo is planning other conferences for 2011.

Payment of the Scottish Emergency fund

The winter of 2009 / 10 was particularly harsh, and many

livestock farmers lost more animals than they normally would.

In April 2010 The Scottish Government’s Rural Affairs

Secretary Richard Lochhead announced that Scotland's sheep

Stakeholder Engagement

Delegates at the Collector conference

sector would receive £200,000 in emergency aid to help

dispose of the thousands of animals that perished.

NFSCO successfully worked with the livestock industry and

Scottish Government to pay out every penny of this money. To

avoid long and expensive administration NFSCo analysed all

sheep collections for the aid period and allocated the grant to

individual farmers based on use. The eventual figure was

equivalent to a subsidy of 20%. NFSCo administered the

money either via a credit note against further collections or as

a credit directly into farmer’s bank accounts. Payments were

completed by the end of June. A total of 3,861 farmers

benefited from the money.

NFSCO is proud to have administered this money quickly,

efficiently and without the farmers having to fill out any forms.

It was a “model example” of organisations working together to

present a case for compensation, to get agreement on it

quickly from Government, and to deliver the money in a non-

bureaucratic way.

NFSCo successfully paid out the Scottish Government’s£200,000 aid package with the minimum of bureaucracy.

Operational summary

Re-tendering - GB and Northern Ireland

December 2010

In December 2010 some of GB’s biggest renderers increased

their rendering charges significantly. The main reasons cited

were because fuel and energy costs rose, and because the

value of rendering products fell.

As a result collectors in GB were asked to re-tender their fallen

stock charges early. The situation was different in Northern

Ireland, because renderers there did not increase their prices

as they did on the mainland.

Consequently new collection prices for the 2011 year applied

in GB from 1 December 2010, rather than from the beginning

of 2011, with the NI tariff coming into effect on 1 February

2011.

The tendering process in both cases was conducted on time,

and efficiently, and undoubtedly helped to mitigate price rises.

Some collection prices in certain areas decreased by more

than 20%, for example. This was despite some renderers and

collectors striving for 30% price increases.

NFSCo diversifies to reduce administration costs

Thanks to NFSCo’s unique business model, the skills of the staff

at Ian Potter Associates, and the investment in IT at the

Ashbourne offices, NFSCo is well placed to diversify into other

business areas.

Throughout 2010 various seeds were sown on a variety of

fronts, and one plan came to fruit in November, when NFSCo

formally launched Farm Buyer - a buying group scheme in

conjunction with Anglia Farmers Ltd, the leading agricultural

purchasing co-operative in the UK.

NFSCo members have the opportunity to save money on a

wide range of goods, while NFSCo profits by spreading its

overheads and costs over a wider range of products, goods

and services.

Being a non profit making organisation NFSCo will then use

that added income and profits to reduce the administrative

costs of fallen stock collection. The scheme started by offering

discount on many commonly purchased consumables, with

the objective to introduce fuel, fertiliser and other farm

supplies and requisites in 2011.

Operational Summary

NFSCo collectors get thumbs up from farmers

Collectors continued to maintain extremely high standards of

collections throughout the year. These were monitored on a

monthly basis via NFSCo’s quality-control programme. Over

the course of the year farmers were invited to fill in an online

or postal survey form, questioning them on the efficiency with

which their collector dealt with their collection. Over 5000

questionnaires were returned, with the results stating that

farmers were happy with 97% of collections. The very few

problems that arose were dealt with quickly and efficiently by

either the collectors concerned, or NFSCo’s office staff.

As an incentive to fill in the questionnaires NFSCo offered four

£100 prize draw incentives, allocated regionally.

In order to thank collectors for their high standards of service

NFSco took out advertisements in the main farming press in

May (see opposite).

During the year, and after 3,000 survey responses had beencompleted, NFSCo thanked collectors for their high standardsvia an advert in the key farming press. Eventually over 5,000survey forms were returned.

Compliance

In order to improve member’s compliance position,

traceability and record keeping, November 2010 saw NFSCo

issue new membership certificates, with the annual

compliance statement following shortly after.

The compliance statement enables a farmer to show any

compliance inspector an up-to-date record of all fallen stock

collections made via NFSCo through the year.

A small administration fee of £4.65 + VAT was charged to

cover the report generation and printing of the statement.

Financial Update

David Lovatt, a partner at Brassingtons

in Staffordshire, says that NFSCo’s

guaranteed payment system is

“invaluable” to his business, and

estimates that he would have to employ

another person in the office to deal with

the 400 to 500 invoices a month that are

currently being dealt with by NFSCo.

“There are bad payers in every industry

and farming is no different. Being paid

on time and not having to worry about

so many late payers or bad debts is

worth a lot of money to our business.”

Around three quarters of the firm's

client base use NFSCo. He’d like more

farmers on it because of the ease of

paperwork and the single payment from

NFSCo, but he accepts that encouraging

farmers to switch-over won't be easy.

He has always supported the principles

of NFSCo, and believes that the fallen

stock collection industry is much more

professional now than it ever has been,

and credits NFSCo with contributing to

this. “Collectors and the industry as a

whole have moved on significantly since

BSE. NFSCo has raised the bar in terms of

rules and regulations, and we've got

much better in terms of our operation

and service with quicker pickups, more

professional with our sealed vehicles

and their drop trays and our much

improved biosecurity, and also more

skilled and valued through the general

services we offer like TSE sampling.

Collectors should provide a service that

is fitting to the 21st century, and I think

most of us are doing that.”

Financial update

NFSCo is a Community Interest Company, with the profits

reinvested in the business to reduce the administrative cost of

fallen stock.

Turnover for 2010 was up again on 2009, as a result of a steady

increase in membership . Thanks to the efforts of Ian Potter’s

administrative staff our bad debts are again down, and remain

low.

All in all, therefore, NFSCo’s financial position can be described

as being solid, and this provides us with a perfect platform for

our efforts to diversify into new areas and increase our

turnover accordingly.

Any member who wishes to see a set of detailed accounts

should request them in writing from our registered office:

c/o Saffery Champness,

Stuart House,

City Road,

Peterborough,

PE1 1QF

David Lovatt, Brassingtons.

What a collector says about NFSCo’s payment terms . . .

National Fallen Stock CIC

Sallyfield Lane

Stanton

Ashbourne

Derbyshire

DE6 2DA

Helpline number: 0845 054 8888