By Isabel Davies

 LEVY PAYERS are to be asked whether the five farming levy bodies, which cost producers more than 50m a year to run, need to be reformed or rationalised.

The government has announced the terms of reference for an independent review of the levy bodies, which could lead to some of their functions being dropped or merged.

 The study, which will also look at how the bodies are funded, will cover the work of the British Potato Council, the Horticultural Development Council, the Home Grown Cereals Authority, the Meat and Livestock Commission and the Milk Development Council.

It will be carried out by economist Rosemary Radcliffe, who has served on DEFRA”s Sustainable Food and Farming Strategy Implementation Group since 2002.

Ms Radcliffe has been asked to start work on Apr 4 and to report to ministers by the end of October 2005.

 Her terms of reference are to “undertake a cross-cutting and fundamental review of the rationale for, and role, organisation, funding and functions of the GB and UK statutory agriculture and horticulture levy bodies”.

 Junior DEFRA minister Lord Whitty said the review, which was first suggested 16 months ago by Lord Haskins, would take into account the evolution of the UK”s agricultural, horticultural and food industries.

“With the co-operation of all concerned, I believe that this review has the potential to make a significant contribution to the future of UK agriculture and horticulture.”

The move has been welcomed by farm leaders, who say that it is an important step in ensuring the bodies are relevant to the industry in the wake of CAP reform.

 “The legislation establishing the five UK levy bodies is at least 35 years old, so the time is right for a review,” said NFU Scotland”s president John Kinnaird.

“While each individual levy body is reviewed each five years, this review will take an overarching look at all five.”

 NFU deputy president Peter Kendall said the review came at a crucial time as the industry had changed enormously in recent years.

But he added: “While it is right for the review to consult widely, the focus must be on how the bodies can best contribute to the success of British farming. The interests of farmers, by far the biggest levy payers, must be paramount.”

 Andrew George, Lib Dem shadow DEFRA secretary, said his view was that there was clearly room for amalgamation and reform of the levy bodies.

 “With the advent of decoupled payments, the industry has to demonstrate greater market orientation. Therefore, the prospect of lifting restrictions and statutory levies has to be considered – including whether to move to a more voluntary basis of support.”

isabel.davies@rbi.co.uk