Adding value for levy payers
Agriculture and Horticulture Development Board
Corporate Plan 2013/16
02 April 2013
Contents
PageChief Executive’s Foreword / 2
About AHDB / 4
Background to the Plan / 6
AHDB Strategic Plan and Targets / 8
Funding the Plan / 26
AHDB Levy Rates 01/04/13 to 31/03/14 / 27
Budgets / 28
Chief Executive’s Foreword
Agri-food is the United Kingdom’s biggest manufacturing industry employing 3.5 million people (13.6%) and contributing £85 billion (6.9%) to our economy.
As a levy board AHDB exists to address areas of market failure. We are entrusted with money from farmers, growers and others in the supply chain to play a pivotal role in helping to make those agricultural and horticultural industries more efficient, competitive and sustainable. We add value to levy payers in many ways, both at the strategic level as well as at the very practical individual business level.
Strategically we are delivering in two ways – firstly we are informing the debate and decision making processes within United Kingdom Government and stakeholders and the European Union through providing factual, evidence-based information and market analysis. For example on the Common Agricultural Policy (CAP) reform our analysis on the potential impacts of different policy options/proposals was an essential component to our stakeholders’ understanding some of the possible ramifications. We are also a primary contributor to Defra’s Green Food Project, the Agri-Food Export Forum and other policy advisory platforms.
Secondly we are working with industry partners to map out and help co-ordinate the way ahead on key strategic issues – on industry skills, on delivering agriculture and horticulture’s share of the nation’s carbon reduction commitments through the Greenhouse Gas Action Plan. We have helped to spell out the industry’s view on the research priorities for United Kingdom agriculture in order to help guide policy makers and funding providers over the next two decades – this work has contributed towards shaping the Government’s emerging Agritech Strategy.
At the coal-face our aim is to provide very practical support to help the primary production and supply chain businesses (our levy payers) operate more efficiently and overcome immediate issues. This work is led by our farm-level knowledge transfer/exchange activity based on research and development, the provision of essential market information to improve supply chain transparency and market development activity (see examples on pages 11 to 26).
Working together, both across our own sector-focused operating divisions as well as with external partners is achieving significantly better return on investment for levy funds. For example we currently have 39 joint sector-funded R&D projects valued at £15 million – one of these is where our crop divisions (HDC, HGCA and Potato Council) are sharing the cost of a project on insecticide resistance management in the peach-potato aphid - each sector will benefit from the work but for a third of the cost to each levy of doing it alone. Welsh Government money has enabled significantly more, and better co-ordinated, dairy sector work to take place in Wales; 50% Scottish Government funding has enabled two very successful monitor farms to be set up to assist cereal growers in Scotland; and Rural Development Programme for England money from Defra and the European Union is significantly boosting the quantity of levy-funded farmer skills development.
There is clear evidence that more efficient businesses are more environmentally and economically sustainable. As a direct consequence of the immense amount of work we do to improve business margins and productivity we are also helping to deliver the environmental goods expected from agriculture and horticulture. For example greenhouse gas emission modelling for beef cattle shows that the carbon footprint has fallen to 14.41kg of carbon dioxide equivalents (kg CO2-e) per kilogram of liveweight – it was 23.05kg CO2-e in 1970.
Levy payers are at the heart of what we do and accountability to these customers is very important to us. We achieve this through our structure and levy payer involvement is reflected in the delivery of all our services. We have sector boards, committees and panels comprising levy payers and other industry stakeholders who help shape all our work programmes and propose required levy rates. The chairs from our six sector boards sit on the main AHDB Board. We hold regular open meetings, conferences and workshops for levy payers and industry stakeholders around the UK giving those that choose to, plenty of opportunity to engage. Our teams can be found exhibiting at most of the major agricultural shows. We also consult widely on this Corporate Plan and the proposed levy rates for the year ahead.
AHDB is making a difference – on areas such as soils, water, on animal and plant health, on export market development, in schools, with skills in the industry, on essential market information and with consumer communication. The industry is also starting to benefit from the development of a strong ‘AHDB voice’ on industry issues.
This document summarises how we plan to continue to add value for levy payers.
There are no levy increases proposed for 2013/14.
Tom Taylor
Chief Executive and Accounting Officer
About AHDB
Serving the levy payer
What we are
The Agriculture and Horticulture Development Board (AHDB) is a statutory levy board, funded by farmers, growers and others in the supply chain and managed as an independent organisation (independent of both commercial industry and of Government).
Our purpose
Our purpose is to make our agriculture and horticulture industries more competitive and sustainable through factual, evidence-based advice, information and activity.
What we do
Ø We deliver extensive research and development programmes which are delivering scientifically-robust and commercially useful outcomes for our levy payers
Ø We undertake efficient farm-level knowledge transfer programmes based on evidence both from third party science and our own R&D aimed at improving efficiency, productivity and sustainability
Ø We provide unbiased, high quality market information that helps business decision making and improves supply chain transparency
Ø We carry out export market development work and also domestic marketing activity to inspire and inform consumers in order to assist the economic viability of sectors which require this
Ø We raise awareness of food and where it comes from among school children and we help ensure the agriculture and horticulture industries are able to develop and attract workers with the skills needed to operate effectively
Ø We also ensure that proper account is taken of Government priorities for agriculture and the agri-food industry, where appropriate.
Who we work for
Levy payers are at the heart of what we do. Our delivery of support services to them is focused through six branded operating divisions:
· Pig meat in England – through our BPEX division
· Milk in Great Britain (GB) – through our DairyCo division
· Beef and lamb in England – through our EBLEX division
· Commercial horticulture in GB – through our HDC division
· Cereals and oilseeds in the UK – through our HGCA division
· Potatoes in GB – through our Potato Council division.
Page 28
AHDB structure
Our philosophy is that levy payers are at the heart of what we do. In order to deliver genuine levy payer focus there is a sector advisory committee (known as ‘sector board’) for each of the six commodity sectors represented by AHDB. Each sector board comprises levy payers, other stakeholders from the sector and independent members. The main AHDB Board has delegated the responsibility to each sector board to develop the most appropriate strategies to meet the challenges of the sector; to ensure the relevant levy rate is recommended in order to provide adequate funding for the required work; to monitor strategy implementation and to approve remedies where performance deviates from the plan. The sector board members are appointed by AHDB.
The main AHDB Board consists of the chairman, the six chairs of the sector boards and three independent members. The main AHDB Board members are appointed by the Secretary of State for Defra, acting with Ministers from the Welsh Government, Scottish Government and Northern Ireland Assembly.
The day-to-day management of AHDB is overseen by a Senior Executive Team (SET) led by the Chief Executive:
AHDB commercial subsidiary
There is also one commercially trading subsidiary within the AHDB group called Meat Livestock Commercial Services Limited (MLCSL). It is a wholly owned subsidiary of AHDB and run as a separate company, limited by guarantee. All its costs are fully accounted for within the company and it returns any profits to AHDB to supplement levy funds.
MLCSL provides data, advice, logistics, equipment and inspection services (including independent carcase classification) to the meat and livestock industry on a commercial basis, contributing to the industry’s efficiency and profitability. It operates on a national basis throughout the UK.
Additional background on AHDB can be found on its website: www.ahdb.org.uk
Background to the Plan
Analysis of the challenges
In our autumn 2012 planning process, we have considered the key challenges and opportunities facing the UK agriculture and horticulture industry through a detailed PESTLE analysis process (Political, Economic, Sociological, Technological, Legislative and Environmental). For each factor we considered, we looked at the potential impact and, given that the six commodity sectors we work with are affected by the factors to varying extents, we ranked each (High, Medium or Low), for the effect on each sector. A copy of the PESTLE analysis can be found in the corporate plan section of the AHDB website: http://www.ahdb.org.uk/publications/corporate.aspx
The PESTLE challenges have then been considered in the light of:
(i) the relatively limited levy resources available with which to address them
(ii) the individual industry sector priorities
(iii) the degree to which any AHDB levy-funded intervention could produce a tangible benefit for levy payers.
Not all the issues highlighted in the PESTLE are therefore addressed within the Plan.
Cross sector Pestle priorities
In looking at the Pestle the Board identified five issues that were important across all six AHDB sectors. These areas are:
· More effective near market R&D and KT delivery – improve reach and speed of uptake
· Soils management – address how to enhance, protect and sustain soil structure
· Water – look at ways levy payers can improve management
· Inputs - improve efficiency of use
· Legislative compliance – do more to provide technical information and analysis to aid legislators and more to support levy payers on compliance.
Corporate Plan timetable
The process that is followed to finalise this AHDB Corporate Plan is laid out below:
DATE / ACTION16 November 2012 to
11 January 2013 / Stakeholder Consultation – Draft plan, recommended levy rates and provisional budgets put out for consultation with industry stakeholders, Defra and devolved administrations.
29 January 2013 / AHDB Board Meeting considers and agrees an amended draft taking into account the industry feedback. The Board also signs off the levy rates to be recommended to Ministers.
Mid-February 2013 / Ministerial Approval – Final draft plan including provisional budgets put to UK Ministers for endorsement of the plan and approval of recommended levy rates for 2013/14.
Mid-March 2013 / Levy Payer Notification – Levy rates which will apply for the coming 12 months are communicated to industry.
26 March 2013 / AHDB Board Meeting – Board agrees final budget for 2013/14 and outline budget for 2014/15 and 2015/16.
1 April 2013 / Publication – AHDB Corporate Plan, including the final budgets, published on AHDB website.
In January 2013 the AHDB Board and Senior Executive Team held a strategy day to look at AHDB priorities to support levy payers over the next five to ten years. The output was that AHDB should have five core priorities and that future corporate and sector plans would be structured around delivering to levy payers against these priorities:
1. Helping levy payers improve productivity and cost management
a. Resource management
b. Climate change
c. Soils and water
d. Managing market volatility
2. Helping levy payers prevent and manage disease
3. Helping levy payers with market development
a. Export development
b. Promoting quality products to differentiate against imports
c. Market information and analysis
4. Helping levy payers understand and respond to the regulatory and policy environment
5. Helping levy payers with the labour market and skills development
The AHDB purpose will remain to make our agriculture and horticulture industries more competitive and sustainable.
AHDB Strategic Plan and Targets
Introduction
AHDB’s role is to deliver value to agriculture and horticulture sectors where there is a market failure need. Demand for this work is increasing as the challenges faced by all levy payers continue to mount.
The framework for this AHDB Plan is provided through the corporate objectives which are derived from the statutory functions defined in the Agriculture and Horticulture Development Board Order 2008. Future plans will be structured around the five priorities introduced on page 7 of this plan.
Each AHDB division has developed a detailed business plan against the corporate objectives for 2013 to 2016. Those for BPEX, DairyCo, EBLEX, HDC, HGCA and Potato Council have been shaped through discussion and input from their sector boards. The core elements of those plans are summarised in this top level Corporate Plan.
AHDB purpose
To make our industries more competitive and sustainable.
AHDB corporate objectives
1. Deliver value for money for Levy Payers in everything we do
2. Improve efficiency and productivity in the industry to help levy payers have thriving businesses
3. Improve marketing in the industry to help profitability and customer awareness
4. Improve services that the industry provides to the community
5. Improve ways in which the industry contributes to sustainable development
The core strategic work programmes for objectives 1 to 5
1. Deliver scientifically-robust and commercially useful outcomes for our levy payers; nurture more joint-sector projects within AHDB through better forward planning; strive to secure match-funding across a wider range of activities through extended partnership/collaborative working; also continue to seek out ways to maximise the efficiency of AHDB operations (procurement, streamlining processes, board/committee/panel costs).