AHDB’s Pork Sector Council is proposing to raise the pork levy for the first time in 20 years, and it’s a significant hike. In the latest issue of Pig World, Pork sector chair Mike Sheldon told ALISTAIR DRIVER AHDB will now embark a conversation with levy payers to gauge their views
Over the next six weeks or so, AHDB will be on a mission to gather support from levy payers for increases in levy rates across all four of its sector bodies – Beef & Lamb, Cereals & Oilseeds, Dairy and Pork.
The proposal for pork is to raise the overall levy by 21p, taking it from 105p to 126p per pig from April 2024. This would be made up of a 17p increase for producers and 4p for processors, in line with the current levy split.
According to AHDB Pork Sector chair Mike Sheldon, the hike would raise about a further £1.5m from levy payers, taking the total pork sector budget to around £8.6m for 2024/25.
The planned 20% increase in one go follows 20 years during which the pork levy, along with the dairy rate, has not moved at all, while the beef & lamb and cereals & oilseeds levies haven’t changed for 10 years.
This will undoubtedly make the proposed rises harder to swallow for pork businesses, particularly against the backdrop of general input inflation and, of course, the huge losses incurred during the pig crisis.
It also makes it a harder sell for AHDB, which, Mr Sheldon said, needs the backing of levy payers to justify the proposed increases. AHDB will submit formal proposals in the autumn to Defra Ministers, who will then make the final decision.
“We know that the first question that ministers will ask, quite rightly, is: What do your levy payers think about your proposal? So, we are now going to have a conversation with our levy payers through all our channels and at events and online meetings to gauge the mood and their feelings about the proposed increase,” Mr Sheldon said.
While this will not be a formal consultation, he insisted all views – ‘warts and all’ – will be taken into account and reported to Ministers.
“It’s a matter of gauging whether levy payers accept the rises, and we crack on, or whether they really don’t believe in what AHDB does. Either way, we will listen,” he said.
Narrowed focus
The long freeze on levy rates, allied with changes to AHDB’s tax status, means the spending power of levy funds has been reduced by up to 40% over the past decade.
Mr Sheldon acknowledged that AHDB might have been better off going for small incremental increases over the years, although he said it has been able to resist raising it because, as farm businesses have become more professional or larger, or both, they have become less reliant on some of its services.
“For pork, we have narrowed the focus to live within our means – we have become leaner, which has increased the value we offer to levy payers. But there is only so far that can go – we can’t just carry on doing that,” Mr Sheldon.
He outlined where AHDB needed more funding to maintain or enhance the value it delivers.
It recently announced that its marketing efforts, such as the autumn ‘Feed the Family for Less with British Pork’ campaign, will be boosted by being able to use the term ‘British’, following lots of work behind the scenes.
“But we have trimmed our domestic marketing and we are now just beginning to see the early signs of that having a negative impact. There’s only so much you can do with the money available. There comes a point where we can’t carry on trimming that budget. We want to get it back up to where it was two years ago to get better bang for our buck,” he said.
AHDB also wants to ensure it has sufficient funding to continue ‘fighting mistruths and challenging misconceptions’ thrown at the industry, as part of its reputational work.
“When single issue campaigning groups come out with unsubstantiated claims about pork production, we need to be in there combating it and showing it is nonsense,” Mr Sheldon said.
“This work is often not visible, although we have had some visible successes, for example, challenging the Lancet on its study linking red meat and cancer, and the BBC’s reporting of it. But it needs skilled people and its needs investment.
“We would also like to spend more on education – we are getting good traction in schools with our materials, and we’re educating a lot of teachers about food production. We can make a big difference if we can go a bit further.”
He also highlighted the importance of AHDB’s work in export development. “We are fighting for a share of all these export markets around the world – it is a competitive business, and you can’t take your foot off the gas.
“We want to make sure that we’ve got enough money to develop new markets and ensure we are not so dependent on China.”
Levy payer views
Mr Sheldon acknowledged that there will be a range of views among levy payers about whether the rise is justified. “If levy payers resist the increase and we don’t get it, then the value of what we generate will drop and we’ll have to do less,” he said.
AHDB is not allowed to borrow, so it always carries reserves to ensure it can pay its bills. “We are trimming our reserves as tight as we can and we are currently spending more than our income,” he added.
So, would a failure to secure the levy increase threaten the viability of AHDB and the levy model? “No, I don’t think it would at the moment, but ultimately, yes, that would be the conclusion,” he said.
“The services we provide are not available elsewhere and can only be delivered through this collective approach – and we need to deliver them properly to ensure true value to levy payers. I know this sounds like a cliché, but the levy is an investment.
“Of, course we know the pressures producers have been under and we realise the impact the levy rise is going to have. But the test for us is whether we can persuade levy payers that the value they get back comfortably exceeds that levy rate.
“So, we really want people to engage – and we want to hear your views, whether you value the levy or not.”
Making your views heard
- Levy payers can find out more about the details of the proposals by visiting www.ahdb.org.uk
- You can have your say on the proposed levy rise by emailing: [email protected]
- Sector Councils, including pork, will also be available to answer relevant questions via face-to-face meetings, social media and a ‘Funding Your Future’ livestream event throughout the autumn.