My Lords, I thank the noble Baroness for her comments, specifically those on Amendment 212, standing in my name and that of my noble friend Lord Wigley, which seeks to
“provide for repatriation of the levy collected in the United Kingdom supply chain to the devolved administration of origin.”
The agricultural processing sector in Wales, from whence I am speaking, is relatively small in comparison to the agricultural output of Welsh farms. The red meat sector is the predominant agricultural activity in Wales, and the processing facilities servicing this sector are strategically placed throughout the UK to maximise accessibility in a system that is heavily reliant on roads and HGV transportation for the movement of livestock.
With levy funding allocated according to place of cull rather than an animal’s point of origin, the centralised processing system disadvantages farmers in Wales. Furthermore, key products such as Welsh lamb and beef, which benefit from the protected geographical
indication status—PGI—and derive a greater market share due to this status, are culled in other areas of the UK. It is these locations, not Wales, that receive the levy funds. This imbalance, driven by the streamlining and consolidation of the red meat processing and supply chain sector, is causing additional stress on a red meat sector already under significant financial strain in Wales. Levy Boards, with their increasingly important role in promoting the food products of Wales and working with the agricultural sector to improve efficiency and profitability through knowledge and best practice, should receive an equitable share of levy funds that allow them to work effectively in their respective areas of the UK.
As the UK seeks to negotiate new trade deals with other nations, it is the successful marketing and promotion of our flagship products in Wales, such Welsh lamb, 92% of which is currently exported to the European Union, that could deliver transformational change for farmers there. It would be unfortunate if these opportunities could not be delivered due to a poorly structured levy funding mechanism.
The issue of fair levy funding dispersal is also an important consideration when looking at the delivery of sustainable food production in the UK, a point referred to in passing by the noble Baroness, Lady Jones. A proportionately funded levy body could look beyond helping farmers and the supply chain with economic performance towards a focus on environmental and social considerations, especially sustainability.
Looking further ahead, we would all like to see a food supply chain based around local production, processing and consumption; that would provide potential benefits not only for the farmer but for the climate change mitigation agenda, which is so crucial. That is the long-term goal. In the meantime, having resources allocated fairly to the levy bodies will enable them better to support our agricultural producers as they move towards economic and environmental sustainability. I hope the Minister will accept this amendment and indicate that when he comes to reply.