Inflation-rate meat levy increase proposed for Wales

Plans to link red meat levies to the rate of inflation have been put forward in Wales, which could see farmers’ levy payments jump by 8.8% in April 2023 if the current rate of inflation is maintained.

Hybu Cig Cymru (Meat Promotion Wales) has launched an eight-week consultation on introducing a mechanism to link levy rates to inflation to allow it to maintain its spending power.

It calculates that total inflation over the past 10 years has reduced HCC’s levy income in relative terms by 19.2%.

See also: Red meat levies to be returned to home nations from 2021

“Given the breadth and depth of the challenges facing the Welsh red meat industry, it is essential that the Welsh red meat industry has a sufficiently funded red meat body to undertake development, promotion and marketing of Welsh red meat, both at home and abroad; and maintain the momentum already achieved,” it says.

Impact on producer levy

HCC is proposing that in future the levy rates each financial year should reflect annual inflation in the previous calendar year, as measured by the consumer price index including owner occupiers’ housing costs (CPIH).

This was running at 8.8% in the 12 months to September 2022, which would translate into a 38p/head rise in the producer levy for cattle, along with increases of 6p/head for sheep and 9p/head for pigs.

The part of the levy paid by the slaughterer would also rise at the same rate.

HCC says this increase would only apply to the levy collected in Wales, and not to the levy HCC receives as a part of the redistribution agreement for animals reared in Wales but slaughtered over the border.

The money will be spent on continuing to position red meat from Wales as a premium product, developing export opportunities, consumer advertising and knowledge transfer activities.

HCC’s work also includes defending the industry and acting as an advocate for red meat in relation to health and nutrition.

‘Proper scrutiny’

Ian Rickman, deputy president of the Farmers Union of Wales, said the FUW was consulting members on the issue.

“This consultation comes at a time of increased financial pressure for our membership and it is essential that there is proper scrutiny and transparency to ensure that any levy monies collected are spent in a way which is of direct benefit to food producers in Wales.

“We will be discussing the matter with HCC at the HCC conference and winter fair later this month and we will be encouraging members to attend open meetings being held across Wales to ensure that their views are heard.”

Closing date for comments is 22 December.

Rob Lewis, NFU Cymru livestock board chairman, said the union was also encouraging members to share their views by participating in the consultation and attending one of HCC’s planned meetings.

“As part of this consultation process and through the upcoming meetings, it is important that HCC uses this as an opportunity to set out how it intends to spend the proposed increase in levy income, to deliver a return on the investment made by Welsh levy payers.”

Following industry feedback, the HCC board will make a recommendation to the Welsh rural affairs minister.

Subject to ministerial approval, any change in levy rates would apply from 1 April 2023.