The problem of repatriation of red meat levy to Scotland has been a running sore for years, but it has now become a debating point at the highest level with First Minister Alex Salmond and Prime Minister David Cameron taking opposing views.
In a letter to Mr Salmond, the Prime Minister has said the return of the levy income paid by Scottish livestock producers is “more complex” than Mr Salmond and his Government realise.
Mr Cameron sees the solution as being a UK one to be supervised by the Agricultural and Horticultural Development Board (AHDB), the umbrella administrative organisation for UK levy raising bodies.
For his part, Mr Salmond just wants the money back.
It amounts to around £1.4 million annually and consists of levies on cattle, sheep and pigs born and reared in Scotland but slaughtered in England or Wales. The levies on these animals are raised at the point of slaughter.
The problem has become markedly worse over the last year since the closure of the Vion pig processing plant at Broxburn, with many of the displaced pigs being transported south for slaughter.
Yesterday in the Scottish Parliament, Rural Affairs Secretary Richard Lochhead, updated MSPs on the response from the Prime Minister.
Last month, he said, the First Minister had written to Mr Cameron making the case for levy repatriation and pointing to the lost opportunity to promote Scotch Beef, Scotch Lamb and Specially Selected Pork.
Mr Lochhead continued: “David Cameron’s refusal to return Scotland’s levy funds to Scotland means the continuation of the ridiculous situation where Scottish farmers’ contributions go to help promote the produce of their counterparts elsewhere in the UK.
“Our produce is the best in the world and is popular at home and abroad, but well-funded marketing campaigns are important in promoting it and helping to further grow the market. That is the job of Quality Meat Scotland who do an excellent job but for the Prime Minister to back the continued withholding of funds which can help the Scottish meat sector holds back their efforts and will be a disappointment to all involved in the sector.
“I am also particularly concerned that for the first time the Prime Minister is making the spurious argument that the missing Scottish levy payments are somehow benefiting the Scottish industry by going to the Agriculture and Horticulture Development Board, whose own website highlights that their responsibilities are beef, lamb and pork in England.”
The Scottish Government also released the text of Mr Cameron’s reply to Mr Salmond.
“The issue of levy distribution is more complex than your comments suggest,” he wrote.
“As you will be aware, the AHDB generates shared benefits to the red meat industry across the UK through a range of activities, including marketing of meat, export certification and research and development amongst others; this also needs to be understood and factored into the deliberations.
“I know David Heath in Defra has been working extensively with the Scotland and Wales Offices, devolved administrations and levy bodies on this matter.
“I support David’s efforts to find a fair and practical approach that does not impose additional administrative burdens on business.”
NFUS president Nigel Miller said: “This has become an intensely political issue as we approach the referendum.
“As an interim solution, UK levy boards can work together using the significant dislocated funds generated by Welsh as well as Scottish producers on UK priorities.
“This grouping might work on marketing intelligence, export development or knowledge exchange, and free up funding in Scotland for core work, including brand promotion.
“AHDB has been tasked with drafting proposals for working with the Scottish and Welsh red meat levy boards actively to pool activities where suitable, and NFUS would welcome prompt clarification from AHDB on how they see this working in practice.”
Uel Morton, chief executive of QMS, said: “We welcome the letter from Prime Minister David Cameron as very clear recognition at the highest level of the need to take steps to resolve this issue for the Scottish red meat industry.
“It is imperative that the prevailing momentum behind addressing this issue, resulting in our industry missing out on a crucial £1.4m levy income annually, is maintained.
“Our door is open to constructive discussions to take forward a workable proposal to resolve this inequity.
“However, any solution will need to be fair and workable, and offer a real benefit for the Scottish industry.”