Ask AHDB – Cereals and Oilseeds Levy Increase Proposals

[TFF]

AHDB’s Cereals and Oilseeds Sector Council would like your questions about proposals to improve services and deliver more by increasing levy rates from the start of the 2024/25 financial year.

Sector Chair Tom Clarke will be taking part in a Q and A session, responding to questions from levy payers, at AHDB’s ‘Funding Your Future’ livestream event on 9 November.

Tom is a fourth-generation fenland farmer growing around 180Ha of winter and spring milling wheat, along with 40Ha of linseed for seed. He also grows spring oats as part of his rotation. Tom has been on the NFU Sugar Board since 2018.

You can find out details of the proposals for the Cereals and Oilseeds Sector here: Funding Your Future 2023 – Cereals & Oilseeds | AHDB

The Sector Council are proposing an increase in levy rates to:

• Increase independent research
• Improve services such as Recommended Lists and RB209
• Increase farmer-to-farmer learning through Strategic Farms
• Set ground rules for developing carbon and biodiversity markets
• Provide impartial analysis to earn recognition for environmental progress across the industry
• Test and assess the impact of a wider range of products, such as bio-stimulants

The Cereals and Oilseeds Live Q and A session will start at 10:00 GMT on 9 November. Any questions not responded to on the day will be answered after the event and shared in this thread.

 

[AHDB]

Can we legally give assurance for free?

We pay VAT on assurance when we buy it so should be charging VAT when we sell it even though we do no show a cost on the invoice.

Would having to show the cost of assurance +vat separately on the invoice help with the assurance creep we have seen over the past decades ?

AHDB do not currently run any assurance schemes in Cereals and Oilseeds sector.

Assurance is run by Red Tractor in England & Wales and by Scottish Quality Cereals in Scotland and a new scheme is being drawn up between UFU and NIGTA in Northern Ireland. There also exist other specific assurance schemes such as LEAF, Freedom Foods etc.

AHDB is calling for an independent and fundamental review of assurance, which will include the issues you raise regarding VAT.

*If you are referring to the Cereals & Oilseeds Levy, we did used to charge VAT on the levy, but that will no longer be the case since a ruling from HMRC last year.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member

 

[AHDB]

Should there be competition for the provision of grain assurance services, or should there be a single assurance brand?

Answered similar question live,

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

but

AHDB is conducting a review (in consultation with BFU and other levypayers) into all the processes and testing that would be required for domestic grain to enter all UK end-markets outside of the current assurance schemes.

This study will help inform further discussion of this topic and the possible options available for the future.

AHDB is calling for an independent and fundamental review of assurance, which will include the issues you raise.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member

 

[AHDB]

Could the AHDB introduce a basic declaration on the passport type assurance to counter the unfair contributions to RT which disadvantaged your non assured levy payers?

Would solving the assurance issue not be the best use of levy payers money.

Answered similar question live, but

AHDB is conducting a review (in consultation with BFU and other levypayers) into all the processes and testing that would be required for domestic grain to enter all UK end-markets outside of the current assurance schemes.

This study will help inform further discussion of this topic and the possible options available for the future.

AHDB is calling for an independent and fundamental review of assurance, which will include the issues you raise.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

Will you support and work towards an alternative assurance scheme for UK farm produce to compete with Red Tractor as this clearly falls within your remit to find new ways to promote UK produce?
AHDB funded Red Tractor with considerable sums (£240,000) per year for several (over 10?) years, which one of your representatives described to me as 'help with start up costs', until they were withdrawn under pressure from the British Farming Union. Will you therefore fund 'start up costs' for an alternative assurance scheme to Red Tractor to ensure that there is competition in the best interests of UK producers and to prevent unnecessary over regulation of the Red Tractor scheme which unfairly favours the interests of the British Retail Consortium?

As I stated last October at the Shape the Future event AHDB helped set up both RT and SQC, and I’m sure the Sector Council would look at offering similar help to any new assurance schemes that are put forward.

Also answered a similar question live

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

Coming up to date, AHDB is conducting a review (in consultation with BFU and other levypayers) into all the processes and testing that would be required for domestic grain to enter all UK end-markets outside of the current assurance schemes.

This study will help inform further discussion of this topic and the possible options available for the future.

AHDB is also calling for an independent and fundamental review of assurance, which will include the issues you raise.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

Why does Tom Clark think that the difference in price between unassured cereals and world market price is the magic "premium" that RT talk of??? World market price minus for being unassured is not a "premium" no matter how you dress it up. Indeed he found it funny when I mentioned this on this forum.

I do not think that. I was amused that you thought I did.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

Why are AHDB not finding a market for unassured grains?? It seems between them and RT/AIC unassured outlets are diminishing rapidly. It's certainly harder finding an unassured market for my crops that it was 5 years ago.

Answered live from this point in the video:

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

 

[AHDB]

several questions but all on the same issue that i would appreciate direct answer to

Can AHDB confirm how their CEO Tim Rycroft voted on Red Tractors GFC module in his position on the Red Tractor board ?

if (as rumoured) he was not present at the vote did an AHDB representative vote in favour of it ? who exactly from the AHDB was involved in the ‘unanimous approval‘ of GFC ?

Was GFC discussed / voted upon by sector boards ? if so what were those discussions and what was the results of any votes ?

Did AHDB consult formally with any farmer levy payers outside of boards on GFC ?

What is AHDB’s current position on introduction of GFC by Red Tractor in the future ?

I think there are some fundamental issues of trust between farmers and AHDB leadership and boards that the answers to these questions will hopefully clarify

Answered live from this point in the video:

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

 

[AHDB]

Will the AHDB set up an independent grain assurance scheme to stop the RT monopoly and give farmers choice, after all this is in the AHDB’s remit according to government legislation

5. Developing, promoting, marketing or operating—

(a)standards relating to the quality of products, or

(b)systems for the classification of products.

6. Developing, reviewing or operating schemes for the certification of products or of operations connected with production or supply of products.
( taken from gov.Uk)

Answered this or similar question live,

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

but

AHDB is conducting a review (in consultation with BFU and other levypayers) into all the processes and testing that would be required for domestic grain to enter all UK end-markets outside of the current assurance schemes.

This study will help inform further discussion of this topic and the possible options available for the future.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

Our farm business didn't renew Red Tractor membership in 2023, and so we lost our "earned recognition" status.

We therefore flagged up for a local authority Food Standards inspection which was carried out by a qualified Food Standards Officer.

This independent inspection covered grain handling, drying and storage facilities; HACCP documentation, policies, procedures, pest control, field records and grain drying records. The inspection was very similar to a Red Tractor inspection, yet currently passing this inspection is not recognised as "assured" for supplying grain to the mills.

Question 1. After passing this inspection, would AHDB consider my grain to be safe for use in the animal feed and human consumption sectors?

Question 2.
If it's not recognised as safe, why not?
Or if it is (recognised as safe), are AHDB willing to help get this standard recognised and accepted by the mills. If AHDB aren't willing to help get this standard recognised by the mills, then why not?

Answered as similar to another question answered live.

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

But to clarify,

AHDB is conducting a review (in consultation with BFU and other levypayers) into all the processes and testing that would be required for domestic grain to enter all UK end-markets outside of the current assurance schemes.

This study will help inform further discussion of this topic and the possible options available for the future.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member

 

[AHDB]

Q. You (AHDB)finally stopped funding Red Tractor in 2021, although in reality you should never have funded them. Is it now time you worked for the levy paying producers benefit and completely distance yourself from RT and allowed UK produce the same rights as foreign imports?

Answered similar questions live:

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

 

[AHDB]

How much money in total did AHDB pay to red tractor and why?

Did anyone of the other 5 "company guarantors" (owners) give any money to red tractor?

Would you be asking for more levy if this money had not been gifted to a company controlling farmers' access to markets?

Is the money handed to red tractor the cause of the levy increase?

AHDB cut funding of £250k per year to Red Tractor in 2021.

I do not know if any of the other members of the Ownership Body have ever provided funds to Red Tractor.

Yes. The increase in Levy is needed to ensure we do not cut our existing services to levy payers, and have the resources to provide more value back to our sector. For example by improving the Recommended list, and funding £1m per year in one–off priority research guided by Levy payers.

No. AHDB spending power has been eroded since the last levy increase in 2011 by around 40% - this is due to accumulated inflation, as well as standard pay rises and the HMRC ruling that AHDB can no longer reclaim VAT, which alone has cost Cereals & Oilseeds £1m per year. Stopping the funding to Red Tractor is among many other spending cuts we have made over the last 12 years to preserve our spending power in key areas like the Recommended List, Market Intelligence, Fungicide testing etc. For example; spending on research was £2.5m in 2011, and is only £600k in the current year – a cut of over 75% or £1.9m per year. We need a levy increase in order to deliver more back to levy payers. The Sector Council has decided this will not, however, include a resumption of funding to Red Tractor.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

During the past 32 months that you've been aware AIC have accepted Gatekeeper lab tested cereal imports, but specifically haven't accepted this method for UK grain; what actions have you taken to ensure equivalent market access for levy payers?

Have you been actively looking at routes to market that don't include red tractor, i.e. self declaration of production to legal standards or adoption of alternative assurance standards (N Irish for example)?

Answered a similar question live –

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

but,

AHDB is conducting a review (in consultation with BFU and other levypayers) into all the processes and testing that would be required for domestic grain to enter all UK end-markets outside of the current assurance schemes.

This study will help inform further discussion of this topic and the possible options available for the future.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

Why should I and other UK farmers vote to increase the levies, or even continue with them, in light of the revelation that AHDB representatives voted in favour of the Red Tractor 'Green Module' at the board meeting when it obviously favours the interests of the British Retail Consortium rather than UK farmers?

Answered similar question live

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

 

[AHDB]

The single biggest impact to Cereal Farming revenue and prospects is the import of cereals into this country. If the government cannot control imports not grown under the same specifications as that of the UK, will the AHDB look to support UK farmers in demonstrating this and look to ways of publishing data on imported grain end use?

Do you support the current calls from UK farmers for changes to the way UK grains and oilseeds are unfairly disadvantaged by having to meet the costs of assurance which imported grains do not have to comply with and will you help UK farmers by working towards setting up a framework whereby UK grain and oilseeds will have access to UK feed mills/grain merchants on the same basis as imported grains and oilseeds?

Answered Similar Question Live,

Cereals: Funding Your Future 2023

We are hosting four live online events for levy payers on Thursday, 9 November where our sector chairs will briefly take you through the past year and how we...

www.youtube.com

but

AHDB is conducting a review (in consultation with BFU and other levypayers) into all the processes and testing that would be required for domestic grain to enter all UK end-markets outside of the current assurance schemes.

This study will help inform further discussion of this topic and the possible options available for the future.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

do any members of AHDB staff get an income from the AIC, NFU, RT, or any other organisation in the food chain for been one of their board members. If so is this a conflict of interest?

I (Tom Clarke) am directly elected by growers to be a member of the NFU Sugar Board, and I do receive an honorarium for this work. I have done so for the past 6 years. I believe this experience complements and benefits my new role as Sector Chairman for Cereals and Oilseeds, and AHDB Board member. I am used to raising a levy and ensuring it is spent well and in line with levy payer interests. Indeed, speaking personally, I believe there a good lessons to be learned from how NFU Sugar Board operates, and utilises the legitimacy that it derives from having a directly-elected Board.

More widely, all AHDB Board members and Sector Council Members are required to make a public declaration of their interests, and this is updated regularly and published on our website.

https://projectblue.blob.core.windo...Cereals_Oilseeds_SC_Register_of_interests.pdf

All Sector Council Members now must be ratified by a vote of levy payers on appointment, or for existing members, when seeking a second term of 3 years.

Furthermore, all AHDB Board members and Sector Council Members must abide by the Nolan Principles of Public Life, and the regulations as set out in the “Managing Public Money” guidance laid out by Government.

These regulations exceed any requirements of private companies or organisations.

The same regulations apply to AHDB Staff members, although in most cases the AHDB will be their sole occupation.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

How many on the C and O council are 1, NFU members, 2, NFU office holders, 3. Farmers, 4 Others, please specify whether miller, wholesaler etc.

Is the C and O council controlled by NFU?

Answered a similar question live, but

I (Tom Clarke) am an NFU Member and am directly elected by growers to the NFU Sugar Board. I have been elected twice and have served 6 years so far.

Of the remaining 12 members of my Sector Council

AHDB Cereals & Oilseeds Council | AHDB

• 1 has a position on the NFU Crops Board
• 1 has a position on the NFU Scotland Crops Board
• 1 has a position on the UFU Crops Board

All Sector Council Members must declare all their interests, and this declaration is available on our website.

https://projectblue.blob.core.windows.net/media/Default/Cereals%20&%20Oilseeds/Meeting%20Minutes/Cereals_Oilseeds_SC_Register_of_interests.pdf

Of the 13 members of the Council (including myself)
• 9 are farmers.
• 1 is a merchant from a farmer-owned coop
• 1 is a miller

Only 2 Council members are not levy payers, and they have been appointed for their expertise.
• 1 is a leading independent Agronomist, and
• 1 is an international trade expert & agricultural economist.

All Sector Council Members are now ratified by a vote of levy payers – either on appointment, or when seeking a second and final term of office.

C&O is controlled by Levypayers, and operates within the rules laid out by the government. It is not “controlled by NFU”. Indeed, we are accountable to far more levypayers than the NFU is.

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[Levy Believer]

Why do the Ahdb nearly without fail, presist in over estimating planted areas (particularly wheat) and predict more often than record breaking harvests which do nothing but dampen output prices? Examples include this last year predicting 15.5mt harvest when in reality it was nowhere near, and then recently estimating a 1% increase in planted wheat area which is clearly way way off the mark with the current weather. Looking from the outside it looks to be either done on purpose or total incompetence.

At the same time as we predicted a 15.5mt harvest, the trade was predicting a 16mt harvest. Everyone’s predictions were lowered during the year as the crop developed.

All estimates are made at the time, with the best available information. AHDB do not claim to have perfect foresight, but we are an independent organisation with no “skin in the game” - as such the information we provide can be relied upon to not be biased (unconsciously or otherwise) to favour buyers or sellers – simply to help inform the market and provide greater transparency

We published our Early Bird survey on 14th November which is currently predicting that the UK wheat crop will drop to its smallest area since 2020, with a 1.3% fall on last year. This is alongside falling areas for all winter sown cereals and OSR

https://ahdb.org.uk/cereals-oilseeds/early-bird-survey

Tom Clarke – AHDB Cereals & Oilseeds Sector Council Chairman & AHDB Board member.

 

[AHDB]

85% of the AHDB funding comes from farmers. How many of these want digital grain passports, what will be the cost of this, how much of it will be paid by farmers and what will be the payback of this initiative to growers in pounds spent to pounds returned ?

Answered live

https://www.youtube.com/live/2620qzXurng?si=8m5t8LiCiv0xjPoF&t=2166

 

[AHDB]

If there's to be a digital passport, will it be able to hold quality data for which we may get paid, e.g. protein, moisture, HFN, bushel?

Following on from this, as there are price penalties for low bushel, which suggest bushel is a parameter of value, can AHDB negotiate with processors to provide price premiums for higher bushel weights? i.e. quality marks/systems to add value.

Answered live, from this point in the video

https://www.youtube.com/live/2620qzXurng?si=zTn2oui3ZcEMgqgx&t=2367

 

[AHDB]

Q. Can you (AHDB) justify why you need extra revenue and what will the price benefits be to the producer ?

Answered similar question live

https://www.youtube.com/live/2620qzXurng?si=lh4s_exiIDV-59tr&t=763