Fairer red meat levy system proposed

Levy boards have handed ministers an ambitious plan for a fairer red meat levy distribution system, which reflects where animals are born and raised.

At present, levy money is collected at point of slaughter, regardless of where animals spent their lives and where value has been added to beef cattle, sheep and pigs.

But under the new proposed system, animals that have spent part of their lives in different countries would have the levy apportioned across those different countries. 

See also: FUW president hits outs at inequity in red meat levy system

The alternative mechanism has been developed jointly by the three red meat levy organisations in England, Scotland and Wales.

The Agriculture and Horticulture Development Board (AHDB), Quality Meat Scotland (QMS) and Hybu Cig Cymru (HCC) have been in talks for some time considering how changes could be made to the current system to make it fairer.

In recent years, due to declining slaughtering in Scotland and Wales and a growing concentration of abattoirs in England, increasing numbers of animals originating from Scotland and Wales have crossed the border to be slaughtered in England. 

But under the current system, levy on these animals is collected in England and there is no legal mechanism for AHDB to pay levies from England to QMS or HCC.

Similarly, levy cannot be redistributed to England for those animals crossing to Scotland or Wales for slaughter.

Figures calculated by the levy boards suggest that:

• 66% of sheep slaughterings occur in England but only 47% of the breeding sheep are based there
• 96% of pig slaughterings occur in England, but only 91% of breeding pigs are based there
• Wales has 14% of the breeding cows, but only 7% of the cattle slaughterings
• Scotland has 22% of the breeding sheep in Great Britain, but only 10% of the sheep slaughterings.

Dai Davies, chairman of HCC, said: “The new system would take into account the scale of the industry in each of the countries and base the levy distribution on this, which acknowledges structural changes that have happened in the industry across Great Britain over the past decade.”

NFU Scotland vice-president Rob Livesey said: “The joint submission of this briefing by all red meat levy bodies marks useful and welcome progress towards an agreement that would see the distribution of red meat levies better reflect an animal’s lifetime – from birth through rearing to slaughter – and in which country that time was spent.”

If ministers agreed to implement the new mechanism, it would involve some redistribution of the producer element of the levy, with no extra work or cost for producers or abattoirs.

It would be based on information from animal movement databases, among other sources. The processor element of the levy, paid by slaughterhouses, would not be affected.

Before any changes could be made a legislative process, government consultations with the industry across the country would need to be completed. Therefore, it is unlikely any changes will come into force before April 2017.

The levy boards have also agreed to look at new ways of working in partnership on activity where there is mutual benefit, such as supporting export market access work in countries where there is potential to sell pig meat, sheep meat and beef from across Britain.

The AHDB said that the Livestock and Meat Commission in Northern Ireland (LMCNI) has been involved in the discussions on this issue, as they are keen to continue to work together across the United Kingdom on areas of mutual benefit such as export market access, promotion of Red Tractor and so on.

It added that due to the very small net movement of livestock from Northern Ireland, LMCNI has chosen not to be included in the levy redistribution mechanism.