Sector Councils to kickstart discussions over increasing levy rates

Sector Councils representing the Beef & Lamb, Cereals & Oilseeds, Dairy and Pork producers and processors have begun holding discussions about increasing levy rates to address the impact of rising costs on AHDB’s spending power.

With agriculture facing unprecedented pressures, including inflation and the reduction in the Basic Payment Scheme, services provided by AHDB to support levy payers are becoming more important than ever.

Conversations will be held with key industry stakeholders and levy payers during the coming months. If approved, new rates could be implemented from April 2024.

AHDB is focused on delivering the objectives set out in Sector Plans that were published in November 2022 but although significant savings have been made, including exceeding a two-year target of £7.8m by £700,000, rising costs are continuing to add pressure on sector budgets.

With no increase to the levy rate in the Beef & Lamb and Cereals & Oilseeds sectors for more than 10 years and no change in over 20 years for Dairy and Pork, the spending power of levy funds over the past decade has been reduced by up to 40%. This is due to inflation as well as changes to AHDB's tax status (meaning it can no longer reclaim VAT).

Each year the levy is invested in tackling opportunities and challenges that cannot, and will not, be addressed by commercial organisations, individuals or governments. This includes independent research, the Strategic Farm networks, activity to identify new export markets and domestic marketing.

AHDB Divisional Director of Engagement Will Jackson said:

"There is never a right time to be recommending a levy increase, but we believe the current economic climate makes the case more urgent with clear, tangible benefits.

"There have been no increases for over a decade, inflation has eroded the value of the levy by around 40% in this time and there needs to be a significant step taken to close this gap.

"Through Shape the Future, levy payers gave us direction on what is most important to them, and the Sector Councils used this feedback to develop the Sector Plans.

"This was the first time that AHDB had received direct feedback from levy payers on the work we do for them and these results gave us a good indication of where we would need to invest further levy income.

"In order to deliver against these priorities, AHDB is having to adapt the work it's delivering at a time when budgets are being impacted by inflation and a budget reduced by changes to our VAT status.

"Without a levy increase, we will lose the expertise and impact that the four sectors need."