Proposed levy increases to fund the AHDB – What farmers need to know
By Andrew Heskin, Partner and ARA specialist
Farmers and processors across the country could be looking at a significant increase in levies to fund the Agriculture and Horticulture Development Board (AHDB) from next year.
The proposed changes, which are still under discussion, could see levy rates rise by 20-33 per cent depending on the sector.
The proposed levy increases
The proposed rate increases will be presented to Government ministers for approval in December and, if accepted, will come into effect from next April.
Dairy sector – The most significant increase is proposed for the dairy sector, with a suggested 33 per cent rise, taking the farmer contribution from 0.6p/litre to 0.8p/litre.
Beef, lamb, and cereal producers – These sectors could see a 25 per cent increase in their levy rates.
Pig producers – A 20 per cent increase is being proposed for this sector.
Why the increase?
The AHDB argues that the levies have not been increased for over a decade, reducing their spending power by about 40 per cent. The board believes that additional funds are needed to deliver key services identified in last year’s Shape the Future consultation.
For most sectors, the focus will be on stronger marketing and export promotion, while for cereals and oilseeds, the emphasis is on more independent research and strategic farm networks.
The National Farmers Union (NFU) and the National Sheep Association have generally been supportive of the proposed increases, citing the need for a well-funded AHDB to promote and defend the farming sector. However, the Association of Independent Meat Suppliers has expressed concerns, particularly about the AHDB’s engagement with officials on issues that concern levy payers.
What can farmers do to mitigate these levies?
Budget planning – The first step is to incorporate the potential increases into your financial planning for the next financial year.
Engage in consultations – The AHDB is holding a live webinar, ‘Funding Your Future,’ on 9 November. This provides an opportunity for levy payers to share their views before final decisions are made.
Explore grants and subsidies – Look for agricultural grants and subsidies that might offset the increased costs.
Efficiency measures – Consider implementing cost-saving measures in your farming operations to counterbalance the levy increase.
Stay informed – Keep an eye on updates from the AHDB and farming organisations to stay ahead of any changes.
While the proposed levy increases are not yet final, farmers need to prepare for the possibility. By taking proactive steps now, you can better manage the financial impact of these changes should they come into effect next year.
For more advice about how to mitigate costs and how to effectively manage the proposed levy increases, please contact our expert team today.