Ask AHDB – Dairy Levy Increase - Questions and Answers

TFF · Nov 1, 2023

AHDB’s Dairy 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 Lyndon Edwards 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.

Lyndon is an experienced organic dairy, beef and arable farmer with more than 40 years’ experience in the industry. He has a passion for sustainable agriculture and holds numerous industry roles.

You can find out details of the proposals for the Dairy Sector here: Funding Your Future 2023 – Dairy | AHDB

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

Increase consumer marketing campaigns
Increase education work with schools
Highlight the low environmental impact of Dairy production
Stimulate more export demand to grow overseas sales

The Dairy Live Q and A session will start at 12:00 GMT on 9 November. Any questions not responded to on the day will be answered after the event and shared in this thread.

AHDB · Dec 22, 2023

Should AHDB be responsible for unified carbon sequestration model that can be used by the whole industry as a single standard?

Answered at live event Dairy: Funding Your Future - YouTube

(29:12) It would be lovely to do that but our budget definitely doesn't extend that far. But we are working with the industry, I think there’s over 50 different carbon footprint companies out there coming up with carbon footprints. I think that’s bad for the industry because it’s different information in different places. We’re now working very closely with our environment team trying to get national baselines set.

AHDB · Dec 22, 2023

vantage said:
Why hasn’t the misinformation in “Weeatbalanced”, been amended to show the true figures, according to GWP*?

Answered at live event Dairy: Funding Your Future - YouTube

(30:32) GWP100 is the way methane is currently calculated in carbon footprinting. What it says is, you produce methane, it goes up into the atmosphere and it stays there. That’s fundamentally wrong and we need the new tools that are being developed like GWP* which says methane is a cyclic gas. So, actually, yes, a cow produces methane today and that will go up into the atmosphere but in 10-12 years' time it comes back down into the soil, into the grass that the cows are eating, and it’s sequestered back down in. So, the cow is then producing more methane but it’s a 10-year cycle, so all the cow is doing is replacing the methane in the atmosphere that the cow’s mother produced 10 years ago. That’s not a big issue. But that’s not currently how the industry is being charged . That Daisy the cow is the villain of the carbon footprint is absolute rubbish. And we’re out there with our environment team and we’re lobbying British and European government to actually get this corrected. Now because of how advertising standards are set today we can’t just go and say this is the only figure we can use, GWP* replaces the old which is wrong. We’ve actually probably to dual report until we get another year or two down the road and that new emerging science is proved beyond any doubt as being credible. It’s been accepted everywhere we’ve taken it. UK government, European government are now saying yes, this is a better way of assessing methane so we are making great progress, but we can’t throw it away completely from where we were because otherwise, we can't relate to it for advertising standards. And the We Eat Balanced does refer to it in several different places but we’re now amending that to say there’s two different ways to report this and we’re putting both in there.

AHDB · Dec 22, 2023

buffalo_soldier said:
Why are we receiving no defence from the increasing and completely over the top demands from Red Tractor?

They are nothing more than a time, cost and mental burden. That you are assisting in adding to.

Answered at live event Dairy: Funding Your Future - YouTube

(38:10) Well, ADHB has been probably the most outspoken organisation in the industry. Because 2 years ago and again last year we asked for a review of red tractor because we think a lot of what it does it does very well. But we don’t think it is as balanced as it should be, and we believe it needs to evolve. So, we have called for a review twice and I’m very pleased now that there are six organisations on the ownership group for red tractor and where we were a lone voice now, we are not. And we’ve even said if it needs money to pay for the review we’re happy to put some money into it. We believe red tractor should pay for it but if they won’t we’re happy to put money in as an ownership organisation.

AHDB · Dec 22, 2023

Hesstondriver said:
We are seeing reviews in to the RT assurance for Grains and cereals, when can we expect similar levels of burden reduction within Dairy sector ?

How quickly could the requirement for RT Dairy Farms required to be RT for beef be removed?

Does the ADHB fully understand the connection between uk feed mills requiring all grain to be RT and the knock on cost consequence to the UK livestock sector including Dairy?

We are already working on an independent international comparison study of competitor beef and lamb standards and announced a similar study within the Cereals & Oilseeds sector in October.

While it’s not our role to unliterally decide farm standards, we will contribute with independent evidence that helps provide a view on the value of assurance in supporting British farmers.

AHDB · Dec 22, 2023

sjt01 said:
Arla farmers should also get an answer to why Red Tractor is needed when Arlagarden is so much more relevant.

We are already working on an independent international comparison study of competitor beef and lamb standards and announced a similar study within the Cereals & Oilseeds sector in October.

While it’s not our role to unliterally decide farm standards, we will contribute with independent evidence that helps provide a view on the value of assurance in supporting British farmers.

AHDB · Dec 22, 2023

What if we believe a higher increase is required above the current ceiling?

The levy rate ceilings are written into the legislation that governs AHDB to help protect levy payers. If levy payers wanted an increase in excess of the existing ceiling, then the legislation would need to be changed.
The process for a legislative change requires a Defra (with Scottish and Welsh Ministers) to undertake a formal industry consultation, ministers then use this to inform their decision, following which the proposed change to the legislation needs to be debated and approved by Parliament.

AHDB · Dec 22, 2023

What are reserves kept for? Why should we be funding an AHDB savings account?

Answered at live event Dairy: Funding Your Future - YouTube

(42:39) Well, firstly, we are absolutely not funding an AHDB savings account. The sector council comes together once a year to review the budget and where it’s going to be spent. So that’s 10 farmers from around the country and myself and we will channel where that money needs to be spent in the best interest of dairy farmers. There’s a legal minimum reserves level that we have to maintain is at the end of the year. Beyond that all the money is spent for the benefit of farmers as soon as it can be.

AHDB · Dec 22, 2023

If we have a genuine farmer council - surely they have asked all the relevant questions already - if not why have them?

The Sector council are there as representatives of levy payers. On an ongoing basis, Sector Council members (and AHDB staff) seek feedback from levy payers

AHDB · Dec 22, 2023

You say you don’t know who all your LPs are… why is this and how can this problem be fixed?

If AHDB collected all levies direct from every farmer, buyer or processor then we would hold the details of all our levy payers. The fact is the vast majority of AHDB levy payers have their levy collected via a third party - it is deducted by the buyer or processor who holds it and then pays it across to AHDB. AHDB therefore relies on levy payers signing up to receive information or to register in any voting.

AHDB recently asked Defra to make changes to our Statutory Instrument (the legislation that governs AHDB) which would make it mandatory for levy payers to register their details with AHDB. We continue to pursue this with Defra.

Also, many of the processors and buyers that collect the levy on behalf of AHDB said they would be willing to work with us to help us build a more comprehensive voluntary register. We will look to make progress in this area in 2024.

AHDB · Dec 22, 2023

Is KE just a means of reducing COP for the processors and industry to benefit from?

No. Our Dairy KE team are focused on 3 areas: Environment, Animal Health and Welfare and Genetics, All of which underpin the industry’s reputation. Our Strategic Dairy Farm network (which is joint funded by the Betty Lawes Foundation) aims to provide a ‘shop window’ for AHDB throughout Scotland, Wales and England for levy payers to engage with AHDB.

AHDB · Dec 22, 2023

Farmers pay for their milk recording data and then have to pay a levy to access genetic data, shouldn't the semen companies be paying for genetic analyses and not me?

Answered at live event Dairy: Funding Your Future - YouTube

(43:52) I’m very happy to say that the semen companies this year, we’ve gone and spoken to them all because I completely agree (with the question), and they are now paying an increasing share of that budget. This is the first time that they have and all semen companies, we’ve been talking about how we get the collaboration with the industry so people are paying their shares and that’s actually happening now so that’s been achieved this year.

AHDB · Dec 22, 2023

“At a recent meeting discussing ‘Cost of Production’, I was surprised that AHDB had no new data to add insight into the pressures that farmers have been facing under the current milk price. As I understand it, AHDB made the decision to stop purchasing data from consultancies on this subject on the basis of Farmbench. Now that the situation with FarmBench has changed, what does AHDB feel it needs to do to add independent insight into pressures on farmers? Do AHDB feel they have this role at all?

With this area we need to make a judgement on whether there’s market failure – for example Kite, Kingshay and Promar do cost of production analysis. If we were to proceed, we also need to judge if the cost of buying in farm datasets to analyse is good value for levy money. We’re currently working through this area to understand where we can add value to levy payers and whether we can add something different from commercial players.

AHDB · Dec 22, 2023

Supermarket buyers have been using AHDB data to drive down prices. Does freely available information lead to commoditisation? Do retailers make any contribution to costs of AHDB?

Why are our prices freely available? We produce price information so that there is a base level of transparency in the marketplace. Without this, there is a risk of market failure from an asymmetry of information – where one party has an unfair advantage over another due to what they know. The prices we produce are not intended to be used in contract setting, however, we know that there are frequently used in the supply chain. The lack of prices could create more risk for farmers who are unable to challenge or question contracted prices without a source of independent information.

AHDB · Dec 22, 2023

As all the useful functions that DairyCo used to do are now carried out by our milk buyer/cooperative and our excellent local representative has now left, I see no justification for a levy funded body. What are you doing that the likes of Arla and Muller are not doing which might justify a levy at the existing level let alone an increased levy?

Answered at live event Dairy: Funding Your Future - YouTube

(44:55) We do loads of stuff that individual companies don’t do. So the marketing campaign....Arla and Muller will be focusing on their individual campaigns for their own brands for that. Pulling together people on exports and going to export events. Muller actually come along to some of our export events so there’s a number of things that happen there. I think even things like antibiotic use, medicine hub, ahdb building that tool and pulling together the industry. There’s a whole number of things that individual companies can’t do or choose not to do. They are focusing on different things from AHDB. AHDB is about the whole industry and all the farmers and ensuring they have a sustainable future and ideally a profitable future. We’re then interested in things which are dairy farming and the wider industry, individual companies are focused on themselves and their farmers and that’s quite right.

And also we’ve got a situation where all the things we’ve already said about – the marketing, product defence, exports, genetics and genomics – none of the dairy companies can do that, that is something that has to be done by the organisation for the good of the industry. But also all the areas we haven’t talked about, all the marketing information. Abi, at Farmer's Weekly, you quite like all the marketing information that comes out. The industry needs and without that being provided, the knowledge that ahdb gets and shares with everybody, that’s for the good of the whole industry, no company's going to do that because they don’t look that wide, they look at a very narrow band of what’s in their interest not the good of the entire industry

AHDB · Dec 22, 2023

Why does decision on increase come from minister rather than LPs?

Answered at live event Dairy: Funding Your Future - YouTube

(47:26) Well, it’s how the statutory instrument was set up. So the minister has the decision, that’s what was laid down in law when it was set up originally. But the minister has said we want to know, before we go out and say this, that you’ve got the support of the industry and Paul and I have spent the last 6 weeks going around talking at various meetings, to farmers all over the country, dairy shows, literally talking to 1000s of farmers and we do have the majority support. We don’t have 100% support, there are still some farmers who say I’d rather have that money for myself. But when you actually get in front of farmers and say what AHDB does, one of the problems is that some farmers still don’t realise that when they’re looking at a bull catalogue, they don’t realise that all the information they’re looking at has come from AHDB, they don’t know that. So once you actually talk to people and explain all the things you are doing, I’ve had very, very little negativity about the levy increase so I’m quite optimistic that farmers do want to do the right thing, they do want extra money put in to defend their interests because if they don’t it into here there’s no other way to get the benefits for the whole industry.

AHDB · Dec 22, 2023

What if we don’t agree with Levy increase, but DEFRA vote for it?

When reviewing a recommendation from AHDB, Defra (and the Welsh and Scottish Governments) will look for evidence of levy payer and stakeholder views.

AHDB · Dec 22, 2023

Hesstondriver said:
So the question to Adhb here should be :

why do you continue to endorse RT when the supply chain has its own bespoke accreditation?

or

how much longer are you going to continue to endorse RT when the supply chain has its own bespoke accreditation?

Answered at live event Dairy: Funding Your Future - YouTube

(38:10) Well, ADHB has been probably the most outspoken organisation in the industry. Because 2 years ago and again last year we asked for a review of red tractor because we think a lot of what it does it does very well. But we don’t think it is as balanced as it should be, and we believe it needs to evolve. So, we have called for a review twice and I’m very pleased now that there are six organisations on the ownership group for red tractor and where we were a lone voice now, we are not. And we’ve even said if it needs money to pay for the review we’re happy to put some money into it. We believe red tractor should pay for it but if they won’t we’re happy to put money in as an ownership organisation.

TFF · Feb 8, 2024

AHDB levy rate increases in four sectors receive Ministerial approval

Levy rate increases proposed by the Agriculture and Horticulture Development Board (AHDB) for the Beef and Lamb, Cereals and Oilseeds, Dairy and Pork sectors have received approval from Ministers in Defra and the Devolved Administrations.

The new rates will be implemented from April 2024 and allow AHDB to maintain its focus on delivering the objectives set out in the Sector Plans, published in November 2022.

With no increase to the levy in the Beef & Lamb and Cereals & Oilseeds sectors for more than 10 years and no change in over 20 years for Dairy and Pork, the spending power of levy funds over the past decade has been reduced by up to 40%.

AHDB Chair Nicholas Saphir said: “We are pleased Ministers have approved the proposals, which will ensure the levy continues to support the work AHDB has committed to prioritising for farmers and processors across all the sectors we serve.

“The new rates will allow us to enhance our key activity whether, for example, that involves growing export opportunities or exploring further marketing campaigns in the Beef and Lamb, Dairy and Pork sectors as well as increasing our research offering to Cereals and Oilseeds producers.

“Levy payers can be assured that our commitment to helping them navigate through an unprecedented period of change for the industry is secure and we will continue to listen to their feedback to ensure we are delivering real value for money.”

The Government has also agreed that Nicholas Saphir will serve a further 12 months as AHDB Chair.

The extension to Mr Saphir’s appointment means he will remain in the role until 31 March 2025.

Approved changes to levy rates from April 2024

Beef and Lamb (levy rate last set in 2011)

Cattle (excluding Calves) Calves
Producer – £4.05 to £5.06/head of cattle Producer – £0.08 to £0.10/head of cattle
Slaughterer/Exporter – £1.35 to £1.69/head of cattle Slaughterer/Exporter – £0.08 to £0.10/head

Lamb
Producer – £0.60 to £0.75/head of sheep Slaughterer/Exporter – £0.20 to £0.25/head of sheep

Cereals and Oilseeds (levy rate last set in 2011)

Cereal grower – 46.00p/tonne to 58p/t Cereal buyer – 3.80p/t to 4.80p/t
Cereal processor (human/industrial) – 9.50p/t to 12p/t Cereal processor (feed) – 4.60p/t to 5.80p/t
Oilseeds – 75 p/t to 94 p/t

Dairy (set more than 20 years ago)

Dairy farmer – 0.06p/litre to 0.08p/l

Pork (levy rate last set in 1996)

Pig producer – £0.85 to £1.02 Pig processor – £0.20 to £0.24

Ask AHDB – Dairy Levy Increase - Questions and Answers

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Up to 25%

25-50%

50-75%

75-100%

100% I’ve had enough of farming!

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