New levy distribution scheme proposed
Published:  11 December, 2015

Levy boards across England, Scotland and Wales have outlined an alternative method for the distribution of the red meat levy income. 

In a document submitted to the relevant ministers in each country, Agriculture and Horticulture Development Board (AHDB), Quality Meat Scotland (QMS) and Hybu Cig Cymru (HCC) have proposed a scheme that would take into consideration the scale of economic activity in the red meat industry in that nation, rather than only where the animal is slaughtered.

Currently, levies are collected at point of slaughter, regardless of where the animals have spent their lives. Under the new scheme, levies for animals that have spent time in other countries would be allocated to each nation. This is due to increasing numbers of animals originating from Scotland and Wales crossing the border to be slaughtered in England. The levy on these animals is collected in England and there is no legal mechanism for AHDB to pay levy funds from England to QMS or HCC.

The three boards have also pledged to look at working together more when it is mutually beneficial, such as when there is an export market that could buy meat from across all three countries.

Dai Davies, chairman of HCC, explained the positives of the potential new mechanism. “The new system would take into account the scale of the industry in each of the countries and base the levy distribution on this, which acknowledges structural changes that have happened in the industry across Great Britain over the last decade.”

Peter Kendall, AHDB chairman, said: “We were challenged to take a fresh look at the way the levy is distributed. We have subsequently developed a mechanism which could potentially be used to distribute red meat levy in a different way, bearing in mind changes to the structure of the abattoir sector in Britain in recent years.

“It also gave us the opportunity to look at where we can continue to work together closely and jointly fund work that is beneficial to all of us where we face shared challenges. That has to be good news for all of our levy payers.”

Jim McLaren, chairman of QMS, said: “QMS is very encouraged by the progress that has been made by the three GB red meat levy boards on this matter. We hope the proposals now on the table will be fully considered by Ministers allowing us all to move forward.”

The proposals are currently with ministers and a legislative process, including government consultations with the industry across Great Britain, would need to be completed. If adopted, the change is not expected to take place before April 2017.

The levy boards added that if the changes are approved, it would involve some redistribution of the producer element of the levy, but no extra work or cost for producers or abattoirs.

Responding to the proposal, NFU Scotland vice president Rob Livesey said:

“It is now nine years since the Radcliffe review of agricultural levy bodies suggested that, for livestock levies, statutory monies should be returned to promotional bodies in the animal’s country of birth. That was a recommendation that NFU Scotland supported.

“While there are still significant hurdles to cross, the joint submission of this briefing by all red meat levy bodies marks useful and welcome progress towards an agreement that would see the distribution of red meat levies better reflect an animal’s lifetime – from birth through rearing to slaughter – and in which country that time was spent.