AHDB seeks 20-33% rise in farmer levy contributions

Farmers and processors face paying an extra 20-33% in levies to fund the AHDB from next year, if the latest proposals from the four sector councils are accepted by government ministers and the devolved administrations.

The hoped-for increases were set out by the AHDB on Wednesday 4 October (see “AHDB levy rates – current and proposed”) following several months of discussions with existing levy payers and industry stakeholders.

See also: Take part in our online poll on AHDB levy rates

The proposed rate increases, which will be presented to government ministers for approval in December to apply from next April, vary from sector to sector.

The biggest increase, of 33%, is suggested for the dairy sector, which would take the farmer contribution from 0.6p/litre to 0.8p/litre, if accepted.

Beef, lamb and cereal producers are looking at a slightly more modest 25% increase, while pig producers are being asked to pay 20% more.

Conversation

The conversation around planned levy increases started in June of this year, with the AHDB explaining that there has been no increase in the rates charged for more than a decade. As a result, spending power has reduced by about 40% over that time.

It argues more money is now needed to deliver key services, as identified in last year’s Shape the Future consultation.

For the beef, lamb, dairy and pig sectors, the priority is stronger marketing and export promotion; for cereals and oilseeds the emphasis is on more independent research and strategic farm networks.

AHDB chairman Nicholas Saphir said: “There is never a perfect time for such proposals, but it must be noted that it has been at least 12 years since a levy rate was last increased.

“The sector councils are right to explore the option of increasing the current rates, but by taking a proportionate approach that takes into account the effect of the current economic climate on farmers, producers and processors.”

Response

Farming organisations have so far been generally supportive.

NFU president Minette Batters said: “In a challenging environment, a properly resourced AHDB will be vital to promote the value of our products, to seek new markets at home and abroad, enhance the productivity of the industry, and to defend the farming sector’s reputation.”

Phil Stocker, chief executive of the National Sheep Association, said the future success of the sheep industry relied on developing and growing export and domestic markets, and protecting its reputation and market positioning. 

“It feels right that industry is prepared to invest a little more, providing that the money is spent in a way that industry supports,” he said.

But the Association of Independent Meat Suppliers was more circumspect.

“We have concerns that staff at the AHDB have for too long seen the restriction on ‘lobbying’ as a means of not fully engaging with officials on issues that are of concern to levy payers,” said communications lead Tony Goodger.

“If we are to lend our support to any levy increase, it will be on the proviso that the AHDB regularly reports back to levy payers and their representative trade associations on how it has been addressing industry issues with officials.”

Change minds

An AHDB spokesman explained that the levy rises now being suggested were not definitely the ones that will be presented to the government for approval. “There is still room to change our minds, if we really have to,” he said.

A live webinar, Funding Your Future, is to be held on 9 November, providing a further chance for levy payers to share their views, before the sector councils make a final recommendation to the AHDB board and government.