Levy funds row – full statements

A bittter row has broken out about how livestock farmers’ levy money should be spent. Here are the full statements from all involved parties.

Statement from the Association of Independent Meat Suppliers, the Livestock Auctioneers Association, the National Beef Association and the National Sheep Association:

In an unprecedented step the four main specialist livestock trade associations representing the English livestock industry have unanimously rejected the call from NFU President Peter Kendall, made at the recent NFU conference, for English beef and sheep farmers’ levy money to be used collectively for all sectors of GB agriculture.

In a joint statement, the  Association of Independent Meat Suppliers, the Livestock Auctioneers Association, the National Beef Association and the National Sheep Association have reiterated their support for the original Radcliffe vision of levy board reform. However the view of the associations is that this vision seems to be at odds to the current direction of AHDB, on the face of it supported by NFU, which appears to be moving towards a ‘super’ levy board controlling major areas of expenditure with very limited responsibilities being handed down to those representing the individual sectors. The Statement reads

“Levy Board Reform was heralded as an opportunity for English beef and sheep levy payers to fully engage with their levy body and work together to help a sector which has been suffering from years of low prices, high input costs, an increased regulatory burden as well as a poorly functioning supply chain.

“Instead, AHDB has seen this as an opportunity to engineer a centralising move to Stoneleigh putting the experienced and skilled staff base in all existing levy boards at risk. Now with the first sod of dirt not yet dug NFU are already seemingly promoting the centralising agenda of their new neighbours. The specialist livestock organisations do not believe this is in the best interests of English beef and sheep levy payers.

“This centralisation theme takes in Research and Development, where English beef and sheep producers have always wanted their money spent in areas that can provide direct and immediate solutions to the problems they currently face. The specialist livestock organisations believe livestock levies should not be used to fund research projects which are of more use to those sectors already in the happy and deserved position of being in profit.

“The opposition to the centralising principle also includes marketing funds, where the NFU has already publicly stated that it wants English livestock levies earmarked for marketing to be used exclusively to support the development of one logo that would cover all sectors. This untested strategy appears to be inherently flawed, clearly ties the NFU too closely to the major retailers and consequently reduces the opportunities for the beef and sheep industries in England to develop alternative and potentially more lucrative supply chains.

“Although it may not be welcomed by the major retailers and their allies, the specialist livestock organisations believe that it is in the best interests of English beef and sheep levy payers to promote their product using quality based standards that extend throughout the supply chain and that don’t rely exclusively on farm assurance and an inhibited reference to provenance

“One logo, presumably the Red Tractor which is owned by the NFU but not all levy payers, might feel comfortable for them as they seek to please all sectors but the reality is that moving towards this even more supermarket orientated marketing strategy would, for the livestock sector reduce the number of buyers looking for assured stock in our auction markets, weaken vital export opportunities and place downward pressure on prices.

“In both cases it will be the English livestock industry which ends up paying for everyone else’s benefit while our colleagues in Scotland and Wales quite rightly take full advantage of the true spirit of levy reform. Scottish and Welsh producers are not going to desert their own established meat logos and fund one common logo covering all of GB, so why should English livestock producers not be allowed to differentiate their product in the same way.

“The deluded dream of a levy board palace and an all powerful centralised board, espoused by the big boys looking down from on high, is a million miles away from the aspirations and needs of family run livestock farms – the grass roots of our industry – which are struggling to make ends meet. It also totally reverses the progress made in openness, accountability and closer communications with levy payers which has been a feature of the management style under the current structure.

“We now call on all English beef and sheep levy payers to contact their representatives and ensure their concerns are heard. As specialist livestock organisations we will continue to work in the best interests of English beef and sheep levy payers and press the Agriculture and Horticulture Development Board not to be selective in the voices it is listening to. We will continue to oppose an over zealous centralising agenda and never forget our joint remit that is to ensure that the best interests of all beef and sheep levy payers are represented as strongly as possible.

“We would also call on the NFU and AHDB to come to the table and discuss the issues properly with the specialist livestock associations. We also all believe that the debate on these issues should be held properly in the public domain with all beef and sheep levy payers having the chance to make a meaningful input into how their levies are spent.”

Statement in reponse from the NFU:

The NFU has expressed its deep disappointment at the livestock associations who have criticised its stance on the role of the Agricultural and Horticultural Development Board, accusing them of misrepresenting its position and creating unnecessary and potentially damaging controversy.

Commenting on a statement issued under embargo by the four organisations*, NFU President Peter Kendall said it was mischievous and untrue to suggest that the NFU was arguing for English livestock farmers’ levies to be used for other sectors.

“We have always argued that the levies paid by any one sector should be ring-fenced for spending within that sector. These organisations know that perfectly well.

“They have turned down our offer of a meeting and instead issued a highly inflammatory statement which appears to have been designed to stir up as much trouble as possible. I am deeply disappointed by the way in which they have approached this issue.”

Explaining the NFU’s position, Mr Kendall said that the whole thrust of levy board reform was to minimise spending on overheads and duplication, so as to maximise the funding available for promotion, marketing, and research and development.

“The name of the game is delivering better value for the levy payer’s money. One area with obvious potential for doing that is in the promotion of farm assurance standards so as to differentiate British farm produce from the imported competition. We make no apologies for believing that this can best be achieved through the development and promotion of a single, strong, well-supported marque that can be used to add value to the whole spectrum of farm assured outputs.

“AFS offers that platform, which is underpinned by independently audited standards of food chain assurance, respected by the food services, manufacturing and retail sectors, recognised by millions of consumers, and which, at the last count, was already being used on over £8 billion worth of food products at retail level.

“However, we would draw a clear distinction between the promotion of British farm assurance standards, which is an activity common to all sectors and can most powerfully be signified by a single marque, and the promotion of individual commodities or products, which should be entirely a matter for the sector concerned.

“The alternative, of each sector promoting shared standards and values through differing marques, runs the risk of confusing consumers, adding to the proliferation of marques and labels, and incurring unnecessary additional expenditure. Our vision is one in which the various sectors of British farming complement each other in their promotional activities, rather than tripping over each other.

“The NFU is most certainly not advocating that the levies of one group of farmers and growers should be used to fund the promotion of the products of another group of farmers and growers.

“With the spend on research and development, the AHDB should be concentrating on identifying ways in which sector-related spending on overheads and on cross-cutting R&D themes, such as water, climate change and diet and health, can be shared, so that a higher proportion of the levies paid by any one group of farmers or growers is spent on R&D specific to that sector.

Statement from the Agriculture and Horticulture Levy Board:

There appears to be an distinct lack of understanding among some English beef and sheep stakeholders on how the new levy board structure will operate says the chairman of the new Agriculture and Horticulture Levy Board, John Bridge.

In response to a joint statement from a group of trade associations* John Bridge said: “AHDB is developing a sector-specific approach to strategy, not a top-down system.

“Within the new structure, the levy funds from individual sectors will be ring-fenced for that sector – this is enshrined in the new levy board legislation. The strategies to deploy those funds are determined by the boards of the sector companies and levy payers are strongly represented on those boards.

“Indeed, setting strategies based on the needs of the individual sectors is one of the guiding principles of the AHDB business model.

“By far the greatest success will be achieved through the sector companies wanting to work together where it best suits them to achieve a more efficient and cost-effective delivery of their strategies to their own levy payers.

“Yes, AHDB currently has sub-groups exploring if there are any potential efficiency or effectiveness gains to be found from delivering aspects of the R&D and/or marketing strategies on a collaborative basis.

“The fact is the vast majority of R&D is near to market activity best delivered at a sector level but that does not mean mechanisms to enable collaboration where appropriate should not be explored. In the area of marketing the sub-group is looking at a range of areas including promotion of farm assurance and quality marks. This is all still work in progress.

“I am saddened that these important specialist beef and sheep stakeholder organisations did not come and raise their misplaced concerns with me or their board representative, John Cross of EBLEX. AHDB will willingly meet them to discuss these matters, they only need to ask.”

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