HCC calls for review of red meat levy distribution system

HCC calls for review of red meat levy distribution system

The chairman of Hybu Cig Cymru has warned that the promotion of Welsh Lamb and Welsh Beef is at risk unless the system that funds the organisation is revamped.

“While the current system of funding isn’t completely broken, cracks are appearing which will have serious repercussions for levy paying farmers and processors in Wales and also in Scotland unless it is amended swiftly to make it fit for the future,” said Dai Davies.

HCC chairman, Dai Davies says promotion of Welsh Meat is at risk.

HCC chairman, Dai Davies says promotion of Welsh Meat is at risk.

Mr Davies was speaking at a lunch organised by the Farmers’ Union of Wales at the Houses of Parliament to celebrate the range and quality of food products from Wales. The event was attended by MPs and members of the House of Lords

HCC and its Scottish and English counterparts, Quality Meat Scotland, EBLEX and BPEX are funded by a levy collected from farmers and processors at the point of slaughter.

While this has operated for more than a decade, the threat of possible closure that hangs over the future of the Vion plant at Gaerwen and the closure of a pork processing facility in Scotland has thrown the subject of levy distribution into sharp focus.

Referring to the successful way new markets for Welsh Lamb and Welsh Beef have been opened up across the globe, boosting the Welsh economy, Mr Davies said: “The way that HCC and Wales’ exporting companies have worked together to forge new export deals to both existing and emerging markets over the last few years is a testament to the effectiveness of co-operation in business.

“There are, however, potential obstacles to the work that we do to promote Welsh Lamb and Welsh Beef. Top of the list is the threat that hangs over the future of the abattoir at Gaerwen on Anglesey which may close with the direct loss of 350 jobs,” he said. “I sincerely hope it doesn’t come to that. I do hope that the situation can be resolved to save the plant.

“But if the worst does happen and it does close then it will have far reaching effects, not least on HCC’s ability to continue to promote Welsh Lamb and Welsh Beef through independent butchers, supermarkets and wholesalers both in the UK and abroad.

“Our present system of funding, where levies from both farmers and processors are collected at abattoirs, means that if a plant unfortunately closes and everything is transferred to another part of the UK the levy money goes with it.

“So for example when the Broxburn pork facility in Scotland closed and production moved to a plant in England last year, Quality Meat Scotland lost about half a million pounds in levy money overnight.

“I believe there is a need to introduce a more equitable system for levy distribution in the UK which accurately reflects the industry in each individual country. Welsh farmers and processors are already losing out to the tune of about £1 million a year due to Welsh cattle and sheep being slaughtered in England.

“If the sheep currently processed at Gaerwen all move to a plant across the border, we stand to lose another half a million pounds, denting our ability to continue our work to promote Welsh lamb and beef.”

HCC, QMS and AHDB are currently discussing the issue, with one of the options favoured by HCC being the redistribution of levy based on where the livestock is born and reared rather than where the abattoir is located, said Mr Davies.

“From HCC’s point of view, this would not mean a change in the way the levy is collected,” he said. “That system would remain as it is, because the last thing we want is to introduce any changes which would make the present system more complicated.

“Instead both HCC and QMS argue that there should be a transfer of levy money between the three bodies to accurately reflect the relative importance of livestock production in each country. I believe that this would be equitable, low cost and simple to operate.

“I know that this is already on the political agenda. We have discussed this matter extensively with Alun Davies AM, the Welsh Government’s Deputy Minister for Agriculture, Food, Fisheries and European Programmes.

We have also discussed this with Welsh Secretary David Jones and you may have seen a letter by Huw Irranca Davies, the Shadow Food and Farming Minister, in last week’s farming press on this very subject.

I hope that our attempt to review the levy distribution system will gain cross-party support because this is not a party political issue and I hope it isn’t seen as such. This is a common sense approach because it is the appropriate time to look at a system that hasn’t been reviewed since it was set up more than a decade ago.”

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