Red Tractor has revealed it has been forced to reconsider its ‘ambitious advertising plans’, after AHDB decided to stop funding the assurance scheme.
The assurance scheme said it was disappointed with AHDB’s decision, which the levy body confirmed yesterday in a statement, which raised a number of concerns over Red Tractor, including a perceived lack of clarity and understanding by consumers, and questions about the effectiveness of the current assurance process and over how effective the label is in defending the market and/or achieving a premium.
AHDB said it first agreed to put levy funding into Red Tractor following an industry consultation in 2008, which backed the development of a comprehensive food quality assurance scheme to consolidate farm audits and the development of a single label as the manifestation of trusted production standards.
But the AHDB board has now decided it is ‘no longer appropriate to provide this annual seed corn funding as Red Tractor is financially established and self-sustaining’. The decision has taken effect from this financial year. However, Red Tractor has been informed that future funding could be provided if specific projects were identified that would be to the benefit of levy payers.
AHDB Chair Nicholas Saphir said: “It remains AHDB’s clear position that farm assurance is necessary and important to farming success, as a consumer benchmark (or ‘kite mark’) denoting safety, quality and provenance and/or in helping farmers achieve premium prices where food is produced to particular standards which customers and consumers attach additional value.
“Red Tractor is now well established and it no longer requires AHDB’s basic annual financial support. However, AHDB has informed Red Tractor that it would continue to consider providing funds for specific work or projects that are deemed to add demonstrable value to levy payers or help levy payers to reach agreed standards.
“In addition, where there are issues, AHDB will continue to ask the tough questions and use its independence and evidence-based approach to facilitate the finding of solutions between Red Tractor and its’ stakeholders.”
Red Tractor said it was ‘disappointed’ to learn of the decision. “The scale and reach of Red Tractor has grown significantly since its inception, and it is proud to be a strong, independent and financially self-sufficient body working on behalf of the British food and farming industry,” the assurance scheme said in a statement.
“Red Tractor’s core purpose remains the same today as when it was created more than 20 years ago – to reassure the public that British food and drink is safely and responsibly produced. We remain committed to delivering for our members and we continue to listen to them, sharing their ambition for greater promotion of British food and farming.
“We are focused on evolving the scheme to help farmers – as well as the rest of the supply chain – meet the challenges they face. Through our powerful marketing activity, Red Tractor has reached record levels of recognition and trust, with four out of five shoppers now actively looking for the scheme’s logo on packs.
“This provides a significant halo effect, building consumer trust and loyalty towards British food and farming at a critical time for our industry. The scheme helps to give shoppers the confidence to back British food and farming over imports.
“Regrettably, the AHDB’s funding decision means we will now need to reconsider our ambitious advertising plans, which we understand will come as a disappointment to the 46,000 Red Tractor certified farms who rely on us to help promote their world-class produce. However, we will continue to work together with AHDB on many levels, including promoting exports.”
Mr Saphir said AHDB had been raising questions and encouraging parties to come together over the current levy payer concern around grain imports and whether the controls in place for imported grain provide the same levels of assurance and clarity as those of Red Tractor for English product. “Work on this issue is continuing and it remains a very high priority for some of our cereals levy payers,” Mr Saphir said.
AHDB has also written to Red Tractor, following feedback from levy payers on our sector councils who raised a number of points which AHDB said match views being expressed from some of the wider industry, including:
- A perceived lack of clarity and understanding by consumers, some stakeholders, levy payers and the industry of the role of Red Tractor and whether it is a robust baseline assurance scheme or a marketing opportunity to achieve a premium, or both, and if both, whether that is possible without multiple levels of standards?
- Strong and widespread support for a baseline assurance scheme but concerns about the effectiveness of the current assurance process, the relevance and value of some of the existing standards and a perception that there is some inconsistency in their application.
- Conflicting views on whether the marketing of Red Tractor is effective in defending the market and/or achieving a premium?
- A desire to have a baseline that is the same as imported products and for higher standards over that baseline to be rewarded with a premium. There is concern that some producers are forced to operate at higher standards than needed for the markets they serve and are getting no premium for doing so.
Mr Saphir added: “The industry is about to experience a period of considerable change and it is AHDB’s absolute determination to ensure that we are spending levy payers’ money in ways that deliver value by supporting them in successfully and profitably facing the future.
“Currently we are asking levy payers to register to have their say in the Shape the Future next spring, when we will be consulting directly on our own proposed future activities and programmes.”