Five agricultural levy bodies are under review as British farming faces the challenges of a changing market. Anne Voisey reports
Dan Lewis, author of the Essential Guide to British Quangos, said of the BPC: “That such a body exists, with a full complement of 60 staff, because of government legislation is surprising. If such an organisation was necessary, it should be voluntary.”
The review, announced by Defra in March, is intended to ensure that British agriculture is best placed to respond to challenges such as CAP reform and the dominant position of retailers. Industry bodies hope it will be thorough. Kevin Pearce, head of the food chain and farm policy unit at the National Farmers’ Union, says: “We want to see levy bodies become more accountable to levy payers. There should be a very clear return on the investment that comes from the levy bodies. They collect about £55m a year and that’s a lot of money.
“We also think the levy bodies should focus on being able to deliver to the needs of an industry post CAP reform that is very much market focused. We’ve highlighted R&D as a key issue. At the moment, too many people are thinking only about the R.”
Changes in the farming industry are coming thick and fast. Hot on the heels of CAP reform and the single farm payment scheme comes an independent “cross-cutting and fundamental” review of the levy bodies.
An appraisal of at least two of the bodies seemed imminent after a report in February by the Centre for Policy Studies listed both the Milk Development Council and the British Potato Council among the top “nine most useless quangos in the UK”.
George Dunn of the Tenant Farmers Association (TFA), one of the organisations being consulted, warns: “Farmers can no longer rely on their animals and crops making a profit. If they are going to stand on their own feet, we need to get this right.”
Previous calls for the levy bodies to be rationalised (as recommended by Lord Haskins’ review in 2003), have now been replaced by a more comprehensive remit. A spokeswoman for the review says that it could recommend anything from “sticking with the status quo to abolishing the bodies altogether”. The verdict is due in October.
Despite the fundamental nature of the review, the levy bodies themselves are broadly supportive. The Meat and Livestock Commission’s director of communications, Guy Attenborough, says: “We welcome the opportunity to review and update legislation that is 30 years old.” However, he adds: “If the MLC didn’t exist, something very much like it would have to be invented. We are confident that our work will stand up to close scrutiny.”
Some disagree - including farmers, who are by far the biggest levy payers - arguing that the bodies are not in a position to deliver what the industry needs. In its submission to the review, the TFA stresses that marketing should be the key focus of the levy bodies. However, it questions whether this is possible, given their status as public bodies restricted by state aid rules.
Dunn says: “We believe institutionalised bodies such as levy bodies are inherently bad at activities relating to promotion. We see little value in generic promotion or in levy bodies producing state or generic branding.” The way forward, according to the TFA, is for levy bodies to encourage marketing activity among the farming community through training and grants to produce brands and local marketing initiatives. “Their role in marketing should be to facilitate rather than doing it themselves. If this is to be thwarted by state aid rules, then serious questions need to be asked about whether there is any future for levy bodies,” it states.
Attenborough disagrees. “There is still a job to be done by generic advertising in the face of scientific findings and food scares. We need to educate health professionals and consumers about the benefits of meat.”
He also points out that, without the levy bodies, farmers would not have access to additional funding. “Wherever you are looking to maximise budgets through joint funding with the government or EU money, it is subject to state aid rules. They do present challenges, but these are the same as those faced by other member states.”
The hands-off solution favoured by the TFA is taken a step further by those calling for changes to the way levy bodies approach research and development. John Cresswell, a Northumberland farmer and both a cereal and livestock levy payer, thinks that the levy bodies should leave research to the market.
“Much of the research done by the levy bodies appears to be directed towards the less high-performing producers. The leading players in the industry are already funding their own research. The end of levy bodies does not mean the end of research.”
He also takes issue with the fact that levy-funded research is often available to foreign competitors. “It’s unusual for a British sector to fund research that’s often of more use to our competitors than to our own industry.”
However, Jonathan Cowens, chief executive of the Home Grown Cereals Authority, says levy bodies exist to serve their levy payers, who help set their research agenda. “Communicating to our levy payers is the key issue for us, rather than preventing others from getting hold of our research.”
This transparency is an indication of the levy bodies’ status as (non-departmental) public bodies. The consensus is that post CAP reform, British farming needs to become more market-focused and that presents challenges to the levy bodies in their present guise. So what will the outcome be?
Allan Buckwell, chief economist at the Country Land and Business Association, says: “It would be odd if the present structure survived. However, levy bodies are capable of raising funds and provide a way for farmers to work together. Doing away with them would be inconceivable.”
Pearce agrees the outcome is difficult to call, but says: “I’m sure Rosemary Radcliffe, who is overseeing the review, will take a good look at the issue. We have to get to the position where levy payers want to pay because they see a return on it.”
In profile: levy bodies
>>overview of the five statutory bodies
British Potato Council
Responsibilities: To fund research and development, transfer technology, collect and disseminate market information, and advertise and promote potatoes in the UK and overseas.
Income: £6m
Key people: Helen Priestley, chief executive; David Walker, chairman
Reactions to review: Walker says: “It’s a good, wide-ranging review. The potato industry accepts the need for cost-saving benefits through amalgamations if we still have a strong voice.”
Horticultural Development Council
Responsibilities: To undertake applied research and transfer the benefits back to the industry. To sponsor market research or promotion of specific products where there is a collective need.
Income: £5m
Key people: Martin Beckenham, chief executive; Colin Harvey, chairman
Reaction to review: Beckenham says: “We welcome the review. Some of our primary legislation dates from the 1940s. There are bits that need updating.”
Meat and Livestock Commission
Responsibilities: To improve the efficiency and competitive position of the meat and livestock industry and to maintain and stimulate markets for British meat in the UK and overseas through the dissemination of market information, knowledge transfer of research and development, promotion and issues management.
The MLC operates as a federal structure. The responsibility for setting and delivering strategies rests with the boards of four bodies: British Pig Executive; English Beef and Lamb Executive; Quality Meat Scotland; and Hybu Cig Cymru/ Meat Promotion Wales.
Income: £26.2m
Key people: Kevin Roberts, MLC director general, Peter Barr, chairman
Reaction to review: Guy Attenborough, director of communications, says: “We welcome the opportunity to review and update legislation. We feel there is a lot of work to be done to bring about a more competitive and sustainable industry.”
Home Grown Cereals Authority
Responsibilities: To provide market information, promote exports, help develop products and fund research and development on behalf of the UK arable industry.
Income: £9m
Key people: Jonathan Cowens, chief executive; Graham Jellis, research and development director
Reaction to review: Cowens says: “We welcome and look forward to the review. HGCA has an ongoing policy of review to make sure its services support the competitiveness of the UK cereals industry.”
Milk Development Council
Responsibilities: To enhance the technical strength and competitive position of Britain’s dairy farmers through market information, R&D and some promotion.
Income: £7m
Key people: Kevin Bellamy, chief executive; Gwyn Jones, MDC member and chairman of the NFU Dairy Board
Reaction to review: Bellamy says: “We welcome the review. Most of the bodies are here because… they are seen by government as essential and not something that would be supplied by the market.”
Analysis
Dan Lewis, author of the Essential Guide to British Quangos, said of the BPC: “That such a body exists, with a full complement of 60 staff, because of government legislation is surprising. If such an organisation was necessary, it should be voluntary.”
The review, announced by Defra in March, is intended to ensure that British agriculture is best placed to respond to challenges such as CAP reform and the dominant position of retailers. Industry bodies hope it will be thorough. Kevin Pearce, head of the food chain and farm policy unit at the National Farmers’ Union, says: “We want to see levy bodies become more accountable to levy payers. There should be a very clear return on the investment that comes from the levy bodies. They collect about £55m a year and that’s a lot of money.
“We also think the levy bodies should focus on being able to deliver to the needs of an industry post CAP reform that is very much market focused. We’ve highlighted R&D as a key issue. At the moment, too many people are thinking only about the R.”
Changes in the farming industry are coming thick and fast. Hot on the heels of CAP reform and the single farm payment scheme comes an independent “cross-cutting and fundamental” review of the levy bodies.
An appraisal of at least two of the bodies seemed imminent after a report in February by the Centre for Policy Studies listed both the Milk Development Council and the British Potato Council among the top “nine most useless quangos in the UK”.
George Dunn of the Tenant Farmers Association (TFA), one of the organisations being consulted, warns: “Farmers can no longer rely on their animals and crops making a profit. If they are going to stand on their own feet, we need to get this right.”
Previous calls for the levy bodies to be rationalised (as recommended by Lord Haskins’ review in 2003), have now been replaced by a more comprehensive remit. A spokeswoman for the review says that it could recommend anything from “sticking with the status quo to abolishing the bodies altogether”. The verdict is due in October.
Despite the fundamental nature of the review, the levy bodies themselves are broadly supportive. The Meat and Livestock Commission’s director of communications, Guy Attenborough, says: “We welcome the opportunity to review and update legislation that is 30 years old.” However, he adds: “If the MLC didn’t exist, something very much like it would have to be invented. We are confident that our work will stand up to close scrutiny.”
Some disagree - including farmers, who are by far the biggest levy payers - arguing that the bodies are not in a position to deliver what the industry needs. In its submission to the review, the TFA stresses that marketing should be the key focus of the levy bodies. However, it questions whether this is possible, given their status as public bodies restricted by state aid rules.
Dunn says: “We believe institutionalised bodies such as levy bodies are inherently bad at activities relating to promotion. We see little value in generic promotion or in levy bodies producing state or generic branding.” The way forward, according to the TFA, is for levy bodies to encourage marketing activity among the farming community through training and grants to produce brands and local marketing initiatives. “Their role in marketing should be to facilitate rather than doing it themselves. If this is to be thwarted by state aid rules, then serious questions need to be asked about whether there is any future for levy bodies,” it states.
Attenborough disagrees. “There is still a job to be done by generic advertising in the face of scientific findings and food scares. We need to educate health professionals and consumers about the benefits of meat.”
He also points out that, without the levy bodies, farmers would not have access to additional funding. “Wherever you are looking to maximise budgets through joint funding with the government or EU money, it is subject to state aid rules. They do present challenges, but these are the same as those faced by other member states.”
The hands-off solution favoured by the TFA is taken a step further by those calling for changes to the way levy bodies approach research and development. John Cresswell, a Northumberland farmer and both a cereal and livestock levy payer, thinks that the levy bodies should leave research to the market.
“Much of the research done by the levy bodies appears to be directed towards the less high-performing producers. The leading players in the industry are already funding their own research. The end of levy bodies does not mean the end of research.”
He also takes issue with the fact that levy-funded research is often available to foreign competitors. “It’s unusual for a British sector to fund research that’s often of more use to our competitors than to our own industry.”
However, Jonathan Cowens, chief executive of the Home Grown Cereals Authority, says levy bodies exist to serve their levy payers, who help set their research agenda. “Communicating to our levy payers is the key issue for us, rather than preventing others from getting hold of our research.”
This transparency is an indication of the levy bodies’ status as (non-departmental) public bodies. The consensus is that post CAP reform, British farming needs to become more market-focused and that presents challenges to the levy bodies in their present guise. So what will the outcome be?
Allan Buckwell, chief economist at the Country Land and Business Association, says: “It would be odd if the present structure survived. However, levy bodies are capable of raising funds and provide a way for farmers to work together. Doing away with them would be inconceivable.”
Pearce agrees the outcome is difficult to call, but says: “I’m sure Rosemary Radcliffe, who is overseeing the review, will take a good look at the issue. We have to get to the position where levy payers want to pay because they see a return on it.”
In profile: levy bodies
>>overview of the five statutory bodies
British Potato Council
Responsibilities: To fund research and development, transfer technology, collect and disseminate market information, and advertise and promote potatoes in the UK and overseas.
Income: £6m
Key people: Helen Priestley, chief executive; David Walker, chairman
Reactions to review: Walker says: “It’s a good, wide-ranging review. The potato industry accepts the need for cost-saving benefits through amalgamations if we still have a strong voice.”
Horticultural Development Council
Responsibilities: To undertake applied research and transfer the benefits back to the industry. To sponsor market research or promotion of specific products where there is a collective need.
Income: £5m
Key people: Martin Beckenham, chief executive; Colin Harvey, chairman
Reaction to review: Beckenham says: “We welcome the review. Some of our primary legislation dates from the 1940s. There are bits that need updating.”
Meat and Livestock Commission
Responsibilities: To improve the efficiency and competitive position of the meat and livestock industry and to maintain and stimulate markets for British meat in the UK and overseas through the dissemination of market information, knowledge transfer of research and development, promotion and issues management.
The MLC operates as a federal structure. The responsibility for setting and delivering strategies rests with the boards of four bodies: British Pig Executive; English Beef and Lamb Executive; Quality Meat Scotland; and Hybu Cig Cymru/ Meat Promotion Wales.
Income: £26.2m
Key people: Kevin Roberts, MLC director general, Peter Barr, chairman
Reaction to review: Guy Attenborough, director of communications, says: “We welcome the opportunity to review and update legislation. We feel there is a lot of work to be done to bring about a more competitive and sustainable industry.”
Home Grown Cereals Authority
Responsibilities: To provide market information, promote exports, help develop products and fund research and development on behalf of the UK arable industry.
Income: £9m
Key people: Jonathan Cowens, chief executive; Graham Jellis, research and development director
Reaction to review: Cowens says: “We welcome and look forward to the review. HGCA has an ongoing policy of review to make sure its services support the competitiveness of the UK cereals industry.”
Milk Development Council
Responsibilities: To enhance the technical strength and competitive position of Britain’s dairy farmers through market information, R&D and some promotion.
Income: £7m
Key people: Kevin Bellamy, chief executive; Gwyn Jones, MDC member and chairman of the NFU Dairy Board
Reaction to review: Bellamy says: “We welcome the review. Most of the bodies are here because… they are seen by government as essential and not something that would be supplied by the market.”
Analysis
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