AHDB to discuss increasing levy rates with industry
13th Jun 2023 / By Alistair Driver
AHDB has commenced discussions with levy payers and industry stakeholders about increasing levy rates across its four remaining sectors.
Sector Councils representing Pork, Beef & Lamb, Cereals & Oilseeds and Dairy have already begun holding discussions about increasing levy rates to address the impact of rising costs on AHDB’s spending power. Potential levy increases were discussed with AHDB officials during the NPA's latest Pig Industry Group meeting on Tuesday.
Conversations will continue over the coming months, with new rates implemented from April 2024, if approved by Ministers.
There has been no increases in either the Pork or Dairy levies for than 20 years, while the Beef & Lamb and Cereals & Oilseeds rates have remained unchanged for 10 years. The spending power of levy funds over the past decade has been reduced by up to 40% due to inflation and changes to AHDB’s tax status, meaning it can no longer reclaim VAT, AHDB said.
AHDB said it was focused on delivering the objectives set out in Sector Plans that were published in November 2022. Under the new pork strategy, levies focused on three priorities, exports, domestic marketing and industry reputation, while and some services discontinued, including the Pig Health Scheme and Real Welfare Programme. This was accompanied by a reduced pork levy budget.
Although significant savings have been made across the four sectors, including exceeding a two-year target of £7.8m by £700,000, AHDB said rising costs are continuing to add pressure on sector budgets.
AHDB’s 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.
“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.”
NPA chief executive Lizzie Wilson said: “AHDB, similar to many other industry organisations increasingly consider just what they are able to deliver from the reduced income they receive, whilst still demonstrating value for money to their levy payers.
“AHDB previously committed to prioritising three key areas; maintaining and building the sector’s reputation, increasing domestic demand and market access and export promotion, but a lack of adequate resource will mean diminishing effectiveness.”
"NPA encourages all levy payers to engage fully with AHDB as part of this consultation process to ensure that levy payer views are represented."