I completed our annual submissions for the AHDB last week. We pay them two annual levies. They collect 0.5% of the value of our turnover on horticultural crops and we pay an area levy to the Potato Council.
Filling in forms with my teeth gritted always gives me a headache, so I took a little break to look at how our levy rates compare with the other branches of the AHDB. I grew bored after I had done the maths on DairyCo and BPEX but, in rough figures, horticultural producers are paying almost twice as much as their counterparts as a percentage of their turnover. The big difference is that horticultural and potato growers declare their own figures rather than having the loot collected at the point of sale. It works a bit like an honesty box at a roadside egg stall in that respect. It is curious, therefore, that the Potato Council and HDC spend so much money collecting their levies.
I have regular mood changes about the principle of a statutory requirement for an industry to pay for its own advertising and R&D. Some days I agree with it, some days I don’t. It depends on things like the latest research results, how recently we have paid our levy, what the weather is doing and whether I’ve had my morning cup of coffee or not.
Of course, theoretically it is absolutely correct that an industry invests in its future. The problem is that we contribute such a relatively modest amount and farmer apathy is so great that, in practice, it is questionable if the current system delivers enough benefits to justify its existence. The AHDB has made a laudable effort to improve its internal efficiency but, in doing so, it may just have made itself too small and too lacking in focus to make a difference to anyone.
The purpose of the levy bodies is supposedly to make the UK farming industry more competitive. Here is the paradox, you can’t make every business more competitive when they all sell into one marketplace. All that happens is that you make that marketplace more competitive. This is patently in the interests of consumers so why would farmers want to pay for that?
If we are serious about breaking new export markets and delivering costs of production which are low enough to interest the global market then that that is a mighty undertaking. We will need to invest a good deal more than 0.3% of our turnover per annum to achieve that. We might also have to forego some of our high production standards, too. I am not convinced that any of these are desirable, sensible or realistic objectives.
The livestock board’s advertising campaigns for British meat are popular with farmers but do they have an impact which makes a difference to individual levypayers? I was once told that a generic advertising campaign is the equivalent of weeing yourself when you are wearing a dark suit. You give yourself a nice warm feeling for a few minutes but no one can see what you have done.
In our flower business, we spend 5% of our turnover on new product development. We are seeking a commercial benefit that is unique to us. After five years of investment, I am learning the scale of the undertaking. It strikes me that all UK farmers need to decide how much they are prepared to invest and to take more interest in how it is spent.
Matthew Naylor farms 162ha (400 acres) of Lincolnshire silt in partnership with his father, Nev. Cropping includes potatoes, vegetables, cut flowers and flowering bulbs. Matthew is a Nuffield scholar.
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