COMMISSION STAFF WORKING PAPER EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT
Date: 2011-08-30
Institutions: European Commission
Subjects: beef, cattle, database, health control, labelling, meat product

EUROPEAN COMMISSION 

Brussels, 30.8.2011 
SEC(2011) 1009 final 

COMMISSION STAFF WORKING PAPER 

EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EC) 1760/2000 as regards electronic identification of bovine 
animals and deleting the provisions on voluntary beef labelling 

{COM(2011) 525 final} 
{SEC(2011) 1008 final} 

 
 
  
 
 
EXECUTIVE SUMMARY OF THE IMPACT ASSESSMENT 

Accompanying the document 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

amending Regulation (EC) No 1760/2000 as regards electronic identification of bovine 
animals and deleting the provisions on voluntary beef labelling 

1. 

INTRODUCTION 

Regulation  (EC)  No  1760/2000  and  in  particular  bovine  identification  and  voluntary  beef 
labelling were described as "information obligations with special importance in terms of the 
burdens  they  impose  on  businesses"  in  the  Communication  from  the  Commission  to  the 
Council  and  the  European  Parliament  (COM  (2009)544)  "Action  Programme  for  Reducing 
Administrative Burdens in the EU". This Regulation establishes a system for the identification 
and  registration  of  bovine  animals  and  labelling  of  beef  and  beef  products  (including 
voluntary  labelling)  and  includes  provisions  for  double  ear  tags,  holding  registers,  cattle 
passports and national computerised databases. 

Community rules on the identification and traceability of bovine animals were reinforced in 
1997  in  the  light  of  the  Bovine  Spongiform  Encephalopathy  (BSE)  crisis  by  introducing 
conventional  tagging.  At  that  time  electronic  identification  (EID)  was  not  sufficiently 
technically  developed  to  be  introduced  but  has  considerably  improved  during  the  last  10 
years. EID based on (Radio Frequency Identification) RFID introduced, among other things, a 
faster  and  more  accurate  reading  of  individual  animal  codes  directly  into  data  processing 
systems  (enabling  faster  traceability  of  potentially  infected  animals  or  infected  food).  This 
saves labour costs for manual readings but at the same time, increases equipment costs. Thus, 
the  existing  legislation  on  bovine  identification  does  not  reflect  these  latest  technological 
developments.  

The  overall  general  objectives  of  this  proposal  in  terms  of  animal  identification  are  the 
following: 

1.  To support the competitiveness of the sector;  
2.  To reduce administrative burden and simplify procedures in relation to animal passports 

and holding registers 

3.  To  contribute  to  better  animal  and  public  health  through  a  faster  and  more  accurate 

system for bovine traceability 

The general objective in terms of beef voluntary labelling is: 

1.  To reduce unnecessary administrative burden concerning beef labelling 

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2. 

POLICY OPTIONS 

Different policy options are analysed in this report for bovine EID and beef labelling:   

2.1 Bovine EID 

OPTION 1: “DO NOTHING” (OR STATUS QUO) REGIME (BASELINE SCENARIO):    

No  change  to  the  current  provisions  would  mean  that  bovine  animals  would  continue  to  be 
identified by two conventional visible ear tags and there would be no reduction in the current 
administrative  burden.  The  current  legal  framework  does  not  prohibit  Member  States  from 
using  electronic  identifiers  on  a  voluntary  basis,  but  this  must  be  done  in  addition  to  the 
official  visible  tags.  As  no  harmonised  technical  EU  standards  have  been  established, 
different types of electronic identifiers and readers with different RFID frequencies could be 
used in different places.  

OPTION 2: VOLUNTARY REGIME WITH TWO SUB-OPTIONS:   OPTION 2 will introduce EID 
as a tool of official identification. It would not be possible for a Member State to opt for the 
“Do  Nothing”  scenario  under  option  2.  EU  Member  States  may  opt  for  a  mandatory 
introduction  on  their  territory  (OPTION  2A)  or  to  allow  farmers  to  decide  whether  to 
introduce it (OPTION 2B). The establishment of harmonised technical standards for EID and 
reading equipment on EU level would be essential to this option (unlike option 1). However, 
these standards will not go beyond ISO international standards. 

Option 2a: Introduction of electronic identification is voluntary at EU level, and individual 
Member States have the possibility to opt for a mandatory regime in their territory. In 
case the Member State opts for the mandatory regime, the same obligation as under OPTION 3 
would be applicable in that Member State (e.g.: each bovine animal is to be identified by one 
conventional visible ear tag AND one electronic identifier, either an ear tag or bolus). In case 
the Member State opts for the voluntary regime, bovine animals could then be identified by: 

1.  two conventional ear tags, or 
2.  One conventional visible ear tag AND one electronic identifier (i.e. an electronic 

ear tag or a bolus) that has been officially approved. 

Option 2b: Introduction of electronic identification is voluntary at EU level, and individual 
Member  States  do  not  have  the  possibility  to  opt  for  the  mandatory  regime.  Under  the 
voluntary regime, bovine animals could be identified by: 

1.  two conventional ear tags, or 
2.  One conventional visible ear tag AND one electronic identifier (i.e. an electronic 

ear tag or a bolus) that has been officially approved. 

OPTION 3: MANDATORY REGIME 

Each bovine animal is to be identified by one conventional visible ear tag AND one electronic 
identifier  (ear  tag  or  bolus).  Unlike  Option  1,  this  option  would  require  the  development  of 
EU  legal  obligations  for  EID  and  reading  equipment  which  would  not  go  beyond  ISO 
international standards.  

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Table 1: Summary of means of official identification in one bovine animal for each option 

/ 

Option 1  
"Do Nothing 
scenario" 

Conventional 
ear-tag   

Electronic 
transponder (ear-
tag or bolus)  

2 

0 

Option 2 
VOLUNTARY 
" EU MS may opt for a 
mandatory regime "  
2A 
1 (for EU MS going  
mandatory ) 
2/1 (for EU MS under 2B) 
1 (for EU MS going  
mandatory ) 
1/0 (for EU MS  under 2B) 

Option 2 
VOLUNTARY 
" stakeholders may 
voluntarily choose EID"  2B 

Option 3 
"Mandatory at 
EU level" 

 1 (willing to use  EID)/ 
 2(not willing to use EID) 

1(willing to use  EID)/ 
0(not willing to use EID) 

1 

1 

2.2 Voluntary beef labelling 

Two different scenarios are analysed for voluntary beef labelling: 
OPTION 1 – do nothing (baseline scenario): no change in the current system  
OPTION 2 – abolishing the voluntary beef labelling. The specific provisions on voluntary 
beef labelling would be deleted from Regulation (EC) No 1760/2000  

3. 

ANALYSIS OF THE OPTIONS 

3.1 Bovine EID 

This  analysis  is  based  on  three  sources:  i)  an  external  study  finalised  in  20091;  ii)  data 
supplied  by  Member  States  competent  authorities  and  iii)  data  collected  during  stakeholder 
consultations.  The  analysis  shows  that  direct  costs  and  benefits  are  not  distributed  equally 
along  the  food  chain.  Costs,  which  are  mainly  related  to  equipment  (transponders  and 
readers),  are  mainly  borne  by  farmers.  However,  the full financial benefits of the electronic 
device (such as from early e-reading at farm gate level), are for downstream actors in the food 
chain (e.g. markets, assembly centres and slaughterhouses). Additionally, CAs profit from the 
fact  that  all  data  can  be  automatically  computerised,  reducing  labour  costs.  The  study 
concludes that the voluntary option (2A) for the introduction of EID in the bovine sector on 
the basis of harmonised standards would be the preferred option.  

Impacts of option 1 “Do nothing” regime (Baseline scenario)  

No change to the current provisions would mean that each bovine animal is to be identified by 
two conventional visible ear tags. If keepers want to use electronic identifiers on a voluntary 
basis,  this  would  be  in  addition  to  the  two  official  tags.  OPTION  1  does  not  address  the 
problems  as  reported  by  several  CAs  in  audit  reports  (Food  and  Veterinary  Office  (FVO) 
Overview Report 9505/2003). There would also be no reduction of the administrative burden 
for  the  sector.  Most  interviewees  consider  that  the  current  system  for  identification  and 

1 Study on the introduction of electronic identification (EID) as official method to identify bovine animals within 
the EU : http://ec.europa.eu/food/animal/identification/bovine/docs/EID_Bovine_FinalReport_04062009_en.pdf 

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traceability  is  effective  but  could  be  improved.  For  instance,  accurate  tracing  of  bovine 
animals  in  case  of  emergency  may  be  difficult  due  to  the  fact  that  holding  registers  are  not 
always up to date. For example, there could be missing documentation; badly organised data 
and  documentation;  delays,  mistakes  or  an  absence  of  reporting  certain  events  (births, 
movements, deaths) to the central database; and the recording of animal movements through 
markets & assembly centres is not always respected.  

Most of the interviewees consider that the current traceability system is efficient and effective 
but  could  be  improved.  Some  stakeholders  are  convinced  of  the  added  value  of  a  fully 
integrated  EID  system  in  which  electronic  identification  is  a  pre-requisite.  Farmers  that  are 
not  engaged  in  any  field  trials  and/or  research  on  the  subject  reject  the  idea  of  mandatory 
introduction of EID: they do not see any added value by simply replacing a conventional ear 
tag with an electronic one.  

The main concern in this option is the lack of harmonised EU technical standards. Each MS 
can  select  the  standards  it  wants  and  this  approach  may  lead  to  a  lack  of  harmonisation.  If 
technologies used in a given MS are not the ones selected in another MS, electronic exchange 
of data would not be possible in case of export from one MS to another and the benefits of 
having EID systems would be lost. No change to the current provisions would mean that each 
bovine  animal  has  to  be  identified  by  two  conventional  visible  ear  tags.  The  individual 
traceability of bovine animals is guaranteed. If keepers want to use electronic identifiers, the 
current legislation allows for doing so but only in addition to the two official (conventional) 
ear tags, resulting in a total of three means of identification. If farmers decide to go this way 
despite  no  harmonisation  of  technical  standards,  this  option  would  be  more  expensive 
compared to option 2 (voluntary) and to option 3 (mandatory) since animals would need three 
instead of two identifiers. 

Impacts of option 2 Voluntary regime 

Under OPTION 2 is not possible to predict exactly which  EU Member States and/or which 
holdings would introduce EID on a voluntary basis, making specific calculations for these two 
sub-options in the cost model difficult. Therefore, the total cost of OPTION 2 is expected to 
be in a range between OPTION 1 and OPTION 3. After all, if under OPTION 2A EID would 
become obligatory in a specific Member State, this would entail identical costs to OPTION 3. 
Therefore,  cost  figures  per  MS  would  be  as  in  Annex  VI  as  well  as  at  the  Study  on  the 
introduction of electronic identification (EID) as an official method to identify bovine animals 
within the EU. There is no definitive data available on which EU MS would decide to go for 
OPTION 2A or 2B and guessing this information in this report would be difficult. However, 
this report has already referred to a number of EU MS which have decided to go for bovine 
EID on a voluntary basis. 

One of the main advantages of the voluntary approach, regardless of whether it is OPTION 2A 
or OPTION 2B, is based on the fact that actors would have time to familiarise themselves with 
the EID system and identify the added value it would bring in particular circumstances. The 
voluntary option  approach leaves open the possibility of EU Member States and the private 
actors organising themselves, so they can evaluate if it is really an improvement: to consider 
regional  differences,  different  types  of  production  and  whether  it  is  flexible  enough  to  be 
supported by the public authorities. Already now, bovine EID is permitted in several MS and 
used  by  farmers/private  operators  because  of  commercial  interests  and  management 
requirements. If the introduction of EID became voluntary, it can be assumed that this regime 

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would be chosen by the keepers that currently make use of the immediate benefits for farm 
management.  This  is  a  completely  private  decision  taken  for  economic  reasons  (market 
driven) by each operator. However, these actors are also prepared to consider voluntary EID 
depending on what the Commission proposes in terms of regulatory benefit. For instance, if 
individual information were recorded centrally there should be no need to maintain on farm 
holding registers or use movement documents (which are necessary even if passports are not 
required); allowing reporting from third parties (e.g. transporters - so that the keeper does not 
have  to  report  off  movement  as  it  is  already  in  place  for  other  species)  would  also  be  an 
incentive. Also, it was highlighted that there would be significant benefits if the off movement 
could  be  recorded  at  a  critical  control  point  (i.e.  a  market  or  slaughterhouse).  By  including 
these other changes in the regulation, users will identify quantifiable regulatory benefits, and 
would therefore decide by themselves to use EID. Full extrapolation at the Member State level 
or at EU level would, however, remain arbitrary and could quickly lead to wrong conclusions. 
However, the voluntary approach may lead to negative consequences in short term, as the EU 
could be faced with different situations in different MS leading to a certain level of confusion 
in terms of identification. In the case of intra-EU trade it may become rather difficult to trace 
which kind of official identification is being used.  Similar to OPTION 1, some EU MSs (and 
stakeholders) consider that the current system for bovine identification and traceability is fully 
operational and satisfactory as it is. With respect to consumer confidence, under OPTION 2 it 
will  be  difficult  to  determine  the  difference  between  EID-meat  and  conventionally-tagged-
meat,  so  there  should  be  no  impact.  However,  national  or  regional  systems  for  traceability 
may  gain  accuracy  and  speed  for  those  EU  MS  deciding  to  go  for  Option 2A  which  would 
strengthen consumer confidence. 

Impacts of option 3:" Mandatory regime" 

This option may not be the best approach as some stakeholders (e.g. small farmers) would be 
disadvantaged economically, but it would be the most efficient option in terms of consumer 
protection (traceability), reduction of administrative burden, and to avoid risks related to 
the co-existence of two systems of identification. This option would be justifiable in terms 
of  better  coherence  with  EU  policies  on  EID  in  other  animal  species  (e.g.  sheep),.  The 
analysis of OPTION 3 (mandatory) leads to the conclusion that most of the costs are borne by 
the farmers while benefits are distributed all along the food chain. One main criticism from 
stakeholders  is  that  it  is  not  those  who  pay  who  actually  benefit  from  the  investment.  The 
Study  makes  a  distinction  under  OPTION  3  between  the  approach  by  which  all  bovine 
animals  need  to  have  an  electronic  identifier  within  the  first  year  of  the  new  regulation 
coming into effect (one-off regulation-see Table 8) and a transitional approach which would 
entail only newborn animals getting an electronic identifier. Some stakeholders (in particular 
representatives of the meat industry) have expressed their preference for the mandatory option 
and the “within one year” implementation. Option 3 would not lead to the problems described 
under OPTION 2 related to the coexistence of two different systems of animal identification. 
OPTION  3  would  imply  all  stakeholders  using  EID  allowing  optimal  improvements  for 
traceability in terms of accuracy and speed. 

In  relation  to  the  economic  impact  on  stakeholders,  the  most  affected  group  would  be 
livestock farmers because they bear the costs of tagging. A comparison of electronic reading 
and  manual  reading  (option  3  versus  option  1),  clearly  demonstrates  that  the  increase  in 
equipment  costs  (identifiers  and  readers)  is  not  automatically  compensated  by  the  saving  of 
labour  costs  for  farmers.  Some  EU  MS  may  choose  to  compensate  farmers  for  the  costs  of 
tagging  by  making  use  of  rural  development  funds  and  other  types  of  public  state  aids. 

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However,  OPTION  3  may  positively  reduce  the  risks  of  mistakes  when  identifying, 
registering and/or notifying animal movements, resulting in potential reductions of the Direct 
Payment and other CAP schemes compared to OPTIONS 1 and 2. The impact of the use of 
RFID  transponders  in  dairy  and  veal  automation  is  described  in  detail  in  Annex  XXI, 
concluding that the use of the RFID transponders for farm automation is beneficial for beef 
farming,  although  less  beneficial  for  dairy  farms  that  already  have  a  high  degree  of 
automation. On the other hand, electronic reading would be more cost efficient for markets, 
assembly  centres  and  to  a  lesser  extent,  for  slaughterhouses.  These  stakeholders  move 
animals  frequently  and  they  will  face  only  the  costs  of  reading  equipment  and  no  costs  of 
tagging. The impact for EID suppliers (companies) may depend on the how the EU Member 
State  decides  to  organise  supply  among  them  (for  example,  call  for  tender,  national  bodies, 
single supplier/government per EU MS, etc). Some stakeholders (in particular representatives 
of  the  meat  industry)  have  expressed  their  preference  for  the  mandatory  option  and  the 
“within  one  year”  implementation.  There  would  be  budgetary  consequences  for  the 
competent  authorities  as  current  IT  systems  would  need  to  be  adapted  to  cover  electronic 
identification. The Study concluded that CAs would profit from the fact that all data would be 
automatically  computerised,  saving  labour  costs  and  reducing  administrative  burden  for 
the competent authorities. EID may have a positive impact in terms of easing CA's activities 
like auditing the Direct Payment and other CAP schemes (as inspectors are already likely to 
be  equipped  with  readers  for  electronic  reading  of  sheep  and  goats).  Competent  authorities 
may  benefit  more  from  OPTION  3  than  from  Options  2  and  1.  The  possible  impact  on 
consumer prices will be minor compared to OPTION 1. On the assumption that an increase 
in the price for meat would need to occur to set off the increase in production costs caused by 
EID, meat prices would rise by a maximum of 1%.  

The  summary  tables  below  provides  information  on  the  economic  impacts  of  the  estimated 
cost of all official bovine recording tasks for the baseline scenario (Option 1 but referred in 
the tables as Option 3) and the mandatory option (Option 3 but referred in the tables as Option 
1)  per  task  and  for  all  actors.  There  the  total  cost  in  excess  of  the  baseline  scenario  can  be 
retrieved.  The  cost  of  the  Mandatory  option  (referred  as  option  1  in  the  table)  reflects  the 
variations depending on whether electronic ear-tags and boluses are used. 

Table 2: cost comparison for the mandatory and baseline options per task and under two scenarios 

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Table 3: cost comparison for the mandatory and baseline options per each type of actor (in 1000 Euros and in 
%) and under two scenarios 

3.2 Voluntary beef labelling 

Two different scenarios are present for voluntary beef labelling: 
Option 1 – do nothing (baseline scenario): no change to the current system  
Option 2 – abolish the voluntary beef labelling. The specific provisions on voluntary beef 
labelling  would  be  deleted  from  Regulation  (EC)  No  1760/2000,  however,  compulsory 
labelling for the origin of beef would remain unchanged. 
Economic impact of preferred option compared with baseline: the administrative procedure to 
approve  voluntary  indications  on  beef  labels  would  disappear.  Operators  would  be  able  to 
continue  using  existing  labels.  Consumer  information  would  not  be  at  risk  as  all  labelling 
indications  would  fall  under  existing  horizontal  EU  legislation  that  would  be  applicable  to 
beef in the same manner as it is currently already applicable for other meats. The "EU project 
on  baseline  measurement  and  reduction  of  administrative  costs"  calculated  a  possible 
reduction of administrative burden of €362,000. Annex VIII gives a detailed overview of the 
impacts on different operators. 

4 

THE PREFERRED OPTIONS 

4.1 Bovine EID 

It could be concluded that “OPTION 3: Mandatory” is not the best approach at the moment as 
some  stakeholders  (e.g.  small  farmers)  are  disadvantaged  economically,  but  it  would  be  the 
most  efficient  option  in  terms  of  consumer  protection  (traceability),  reduction  of 
administrative burden and avoidance of risk in intra-EU trade.  “OPTION 1: Do Nothing” 
may  lead  to  different  technical  standards  and  to  negative  intra-EU  trade  consequences.  In 

7 

 
 
 
 
 
 
 
 
 
 
addition,  this  option  does  not  fulfil  the  expectations  of  the  sector  in  terms  of  reduction  of 
administrative  burden.    The  “OPTION  2B:  Voluntary  at  stakeholder  level"  was  not 
considered  as  a  valuable  option  by  most  of  the  interviewees  as  it  might  result  in  the 
establishment of two different systems in every EU MS, and ultimately two different markets, 
leading to confusion with possible impacts on the efficiency of the current traceability system.  
The  change  in  the  identification  system  can  be  best  introduced  on  a  voluntary  basis 
(OPTION 2A) with the possibility for each EU MS to decide if it wants to introduce EID on 
a  mandatory  basis  in  its  national  territory.  EU  Member  States  have  very  different  farming 
practices and sector organisations. For these reasons, it would be advisable to recommend that 
it  is  up  to  each  Member  State  to  work  collaboratively  with  all  actors  in  the  food  chain  to 
identify  the  added  values  of  EID  and  to  secure  its  acceptance  so  that  EID  can  be  made 
compulsory  at  the  right  moment.  Each  MS  could  decide  to  introduce  EID  by  law  at  a 
convenient time and not be pushed into it. OPTION  2A may limit problems linked to the co-
existence  of  two  different  systems  of  identification  compared  to  OPTION  2B.  In  terms  of 
reduction  of  administrative  burden,  OPTION  2A  is  preferable  to  OPTION  2B  .  In  conclusion, 
even if electronic identification entails higher costs compared to conventional identification, it 
has been demonstrated that benefits can occur for businesses in specific cases. It is only when 
considering regulatory and business benefits together that EID is likely to be accepted by the 
actors.  Therefore  the  preferred  option  would  be  a  voluntary  regime  (option  2)  with  the 
possibility for Member States to introduce a mandatory regime at national level (sub-option 
2A.) The effectiveness, efficiency and coherence of Option 2A could be assessed some time 
after implementation. On the basis of this evaluation, the Commission could further reflect on 
the need to strengthen the mandatory implementation of EID at EU level. 

4.2 Voluntary beef labelling 

It can be concluded that Option 2 is the preferred option. 

8