AHDB unveils higher levy rate proposals

9th October 2023 | Arable, Livestock, UK Policy & Regulation

The Agricultural and Horticultural Development Board is proposing increases of at least 20% in the farmer and processor levies paid to its four sector councils from the 2024/25 financial year. It says the levies have not increased for at least twelve years – 27 years in the case of Pork – and the increases are needed to maintain services in the face of inflation and rising costs.

The board lost the Horticulture and Potato sectors in 2021, increasing its overheads and, following an HMRC ruling, can no longer reclaim VAT. It says it also needs to meet the cost of levy payer demands to deliver more key services, including marketing and exports for the Beef & Lamb, Dairy and Pork sectors, and more independent research for the Cereals & Oilseeds sector.

The proposals follow a round of industry consultations started last June. The Cereals & Oilseeds levies, last increased in 2011, would see the cereal grower rate rise from 46p/tonne to 58p/tonne, the cereal buyer rate from 3.80p/tonne to 4.80p/tonne; the cereal processor (human/industrial) levy from 9.50p/tonne to 12p/tonne and the cereal processor (feed) rate from 4.60p/tonne to 5.80p/tonne. The oilseeds levy, paid by growers, would increase from 75p/tonne to 94p/tonne.

The Pork levy rate, last set in 1996, would see the pig producer rate change from £0.85 to £1.02/head and the pig processor levy from £0.20 to £0.24/head. The Dairy farmer levy, which has not increased for more than two decades would rise from 0.06p/litre to 0.08p/l milk.

The Beef & Lamb red meat levies were last set in 2011. The proposals would see the cattle levy (excluding calves) rise to £4.05 to £5.06/head for producers and from £1.35 to £1.69/head for slaughterers and exporters. The calf levy would increase from £0.08 to £0.10/head for both producers and slaughterer/exporters. The lamb levy would rise from £0.60 to £0.75/head for producers and by £0.20 to £0.25/head for slaughterer/exporters.

The AHDB Sector councils will make a final recommendation to the AHDB board, which will then put the levy increase proposals to government ministers and devolved administrations later this year for approval.

“The message from levy payers through the Shape the Future consultation was clear – key services provided by AHDB such as independent research, the Strategic Farm networks and activity to identify new export markets as well as domestic marketing, are seen as vital to levy payers,” says AHDB chairman Nicholas Saphir

“This is an unprecedented time for our industry, with inflation alone eroding the value of the levy by around 40%. There is never a perfect time for such proposals. However, 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 impact of the current economic climate on farmers, producers and processors. Therefore, I do recommend that you fully support the proposed increases.”

The NFU says the AHDB must be properly resourced to carry out its tasks of promoting UK products, seeking new markets at home and abroad, enhancing industry productivity in the face of increased competition and defending the farming sector’s reputation.

But NFU president Minette Batters stresses the importance of the AHDB “adapting and responding to the challenges it faces, including those from Brexit, global market instability and rising production costs. In a fast-changing environment, agility is vital.

“Crucially, evidence and data must drive the work of AHDB and value for money must be evident in everything it does – this value must then be demonstrated to levy payers,” she concludes.