Livestock farmers pay extra £1m – but reap the benefits

Scottish livestock producers may have seen the amount they pay in levies to the promotional body, Quality Meat Scotland, rise by more than £1 million last year but every extra penny of that has been recycled into marketing and research.

In the annual report released yesterday in Edinburgh, chief executive Uel Morton highlighted that levy income from Scotland’s cattle, sheep and pig farmers had risen to £4.85m in the 12 months ended 31st March 2011, compared with £3.85m the previous year.

As a result of this increased cash coming into QMS, it had been able to raise its marketing and promotions budget to £2.77m last year; some £700,000 above the 2010 figure.

Morton said that, after a nine-year period where levy rates had remained static and the marketing and promotional budget had been trimmed to just over £2m, the increased funding had allowed QMS to progress with a marketing support campaign covering all three species.

Head of marketing Lauren Vernet pointed to research which showed the benefits from campaigns based on the Scottish label and the natural method of production in this country.

Despite the recession, research showed consumers were still prepared to pay a premium for red meat from this country. He had collected figures that showed the all British average price for beef to be £5.83p per kilo, where the average price of labelled Scotch Beef was £7.66p per kilo. Part of the vast difference in selling price was down to the fact that one third of all generic British beef had been sold on some kind of offer or another.

“This proves the success that we are having in keeping a premium on Scottish produce,” he said.

While the figures for pork and lamb were not as good as those for beef, he insisted the Scotch label still produced a double-digit premium. Additional investment in research took another major chunk of the increased levy money which saw the overall income of QMS rise to just over £7m and leave a net profit of £91,519.

Last year, £1.65m compared with the previous figure of £1.3m was spent on a wide range of projects ranging from improved husbandry through to reducing costs in the abattoir.

The largest single project, the integrated measurement of eating quality, which will cost over £1m, is being co-financed by the Scottish Government. It is now in its second year with practical trials now being carried out in the Scotbeef premises at Bridge of Allan.

While Morton emphasised the good use of the added income and the fact that it was often used, as in the IMEQ project, to lever additional cash, he admitted there was still no resolution to a long-standing issue between the home countries.

He estimated Scotland could have an additional £1m annually in levies if all the lambs born in Scotland were slaughtered in this country. As it is levies are collected wherever livestock go through abattoirs and currently more than one million Scottish sheep are slaughtered annually in England.

“It is a political decision as to when this issue is resolved,” he remarked, adding that the main loser if levy repatriation was brought in would be England.