NFUS has agreed with the main conclusions of the Radcliffe review of the UK’s
agricultural levy boards, however, does not believe the proposed new structure
for UK levy boards is the right way forward.
The Union has agreed that sector-specific levy bodies should continue, covering
cereals and oilseeds, horticulture, milk, potatoes and red meat. These should
continue to be funded by a statutory levy.
NFUS also believes the report correctly identifies the main issues that need
addressing, in particular the need for levy boards to be accountable to the
levy payers in the industry by whom they are funded.
However, NFUS does not believe that the proposed new model for UK levy boards
addresses these issues, nor is it necessarily an improvement on the current
situation. The Radcliffe report has recommended the establishment of a holding
company (so-called ‘NewCo), responsible to UK Ministers, which would
set and collect levies. These levies would then be distributed to the individual
levy bodies (SectorCos). The third element to the model was the establishment
of a service company (ServiceCo) which would provide common back office services
like finance, human resources and IT.
Quality Meat Scotland, the country’s devolved red meat levy body, was
included in the Radcliffe report and the subsequent consultation. NFUS has
reiterated its firm view that there should continue to be a Scottish red meat
body, accountable to Scottish Ministers. NFUS has also stressed that direct
accountability to levy payers is the top priority and believes that a majority
of the Board should be made up of levy payers, preferably by election, along
the lines of its New Zealand equivalent.
NFUS President John Kinnaird said:
“We met Rosemary Radcliffe a number of times during her review and her
report hits the nail on the head when it comes to identifying the main issues.
These are accountability, the scope of levy bodies’ activities, levy
payers’ value for money and cost-effective operation.
“We totally agree that the industry needs a levy body for each of the
main sectors and a statutory levy system is the only viable funding route.
Given the significant market change arising from subsidy reform, together with
changing consumer preferences and an fast- moving regulatory environment, effective
levy boards are more important now than ever.
“However, I don’t believe the introduction of New Co would help
with accountability of levy boards, especially to levy payers. It just seems
to create another layer of governance.
“The principle behind ServiceCo is sound. However, effectively creating
a monopoly by forcing the levy boards to use this service company doesn’t
fit with the principle of ensuring best value. Cost-effective operation is
essential but it would make more sense for levy bodies to jointly tender in
the private sector for common services like IT and human resources.
“It is only a few years since Scotland’s devolved red meat body
was established and the same arguments in its favour then hold true now. Therefore
we would not want to see QMS independence diluted, although opportunities to
work with other levy bodies to avoid duplication must be grasped. Accountability
to the industry is again key and the New Zealand model is worth considering
whereby the Board is elected by levy payers to ensure full accountability.
It could then co-opt other elements of the supply chain to ensure it was inclusive.”
- The review of the UK’s agricultural levy boards began
in March 2005 and was conducted by Rosemary Radcliffe.
five levy boards covered by the review were (budget in brackets):
Potato Council (£5.9 million)
2. Horticultural Development Council
3. Home Grown Cereals Authority (£9.8 million)
4. Meat and
Livestock Commission (MLC’s income is split between four devolved bodies:
English Beef and Lamb Executive (£11.3 million); British Pig Executive
million); Quality Meat Scotland (£4 million) and Hybu Cig Cymru (£3.6
5. Milk Development Council (£7.3 million)
review also included Quality Meat Scotland (QMS), which receives the Scottish
red meat industry levy and carries out the functions of the Meat and Livestock
Commission in Scotland, reporting to Scottish Ministers.
Review examined the needs of the agriculture sectors and the role and performance
of the levy bodies that serve them.
Meetings Highlight Food Supply Chain Concerns
Continues To Fight Injustices In Food Supply Chain
Benefit To Farmers Of Increased Retail Milk Price Rise