Adding value for levy payers Agriculture and Horticulture Development Board Corporate Plan 2013/16 02 April 2013 This is the sixth AHDB Corporate Plan. It covers the three-year period April 2013 to March 2016. It benefits from a consultation period with AHDB’s key stakeholders, whose comments and observations have been taken into account. The performance targets contained in the plan are reported against on an annual basis in the AHDB Annual Report and Accounts, published in July each year. © Agriculture and Horticulture Development Board 2013. All Rights Reserved. Contents Page Chief 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 Page 1 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 AgriFood 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. Page 2 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 Page 3 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 We deliver extensive research and development programmes which are delivering scientifically-robust and commercially useful outcomes for our levy payers 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 We provide unbiased, high quality market information that helps business decision making and improves supply chain transparency 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 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 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 4 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 Board AHDB Chief Executive Director of BPEX division Director of EBLEX division Director of Finance Director of HGCA division Director of Human Resources Director of DairyCo division Chief Scientist Director of HDC division Head of Communications Director of Potato Council division Director of Market Intelligence 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 Page 5 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 16 November 2012 to 11 January 2013 29 January 2013 Mid-February 2013 Mid-March 2013 26 March 2013 1 April 2013 ACTION Stakeholder Consultation – Draft plan, recommended levy rates and provisional budgets put out for consultation with industry stakeholders, Defra and devolved administrations. 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. 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. Levy Payer Notification – Levy rates which will apply for the coming 12 months are communicated to industry. AHDB Board Meeting – Board agrees final budget for 2013/14 and outline budget for 2014/15 and 2015/16. Publication – AHDB Corporate Plan, including the final budgets, published on AHDB website. Page 6 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. Page 7 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 matchfunding 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). 2. Deliver efficient knowledge transfer/exchange programmes based on evidence both from third party science and/or our own targeted R&D. The aim is to achieve increased sustainability for the industry as a whole by reducing costs; increasing yields sustainably; improving quality and optimising use of inputs; and encouraging benchmarking to help levy payers identify areas for business improvement. 3. In sectors where there is a specific requirement, undertake export market development and work to inspire and inform consumers and so assist the economic viability of those sectors. Page 8 4. Give levy payers and the wider industry access to unbiased, high quality market information; raise awareness of food and where it comes from among school children; give health professionals a better understanding of the dietary health and nutritional facts of the foods produced by levy payers; and help ensure the agriculture and horticulture industries are able to develop and attract workers with the skills needed to operate effectively. 5. Further develop sector-focused environmental industry roadmaps in partnership with other industry organisations and help explain and deliver the roadmaps and the targets in the industry Greenhouse Gas Action Plan – focusing on water, soils, fertilisers, pesticides, waste and greenhouse gases. Sector Priorities For the pig sector in England The strategic pressure on the industry, although now more acute, remains as it has been for a number of years. Our lower level of productivity compared to producers in key competitor countries contributes to higher costs of production which are offset, but not entirely, by a price premium for the pigs we sell. Although productivity has been improving, we have not closed the gap on our competitors and the strengthening of Sterling against the Euro threatens to erode our price premium. The BPEX division priorities are to use knowledge transfer and R&D to close the productivity gap and conduct marketing both at home and abroad to try to maintain a sufficient price premium. For the beef and lamb sector in England Against the background of a poor economic climate, future reductions in agricultural support and increasing concerns about the environment, the beef and lamb sectors need to achieve a competitive value for beef and lamb that can sustain production in the UK to maintain both the production base and the supply chain. Beef: Whilst farm gate prices have risen in the last year to a record high, input prices have also risen, negating much of the benefit. Sheep: Higher farm gate prices are now being achieved but higher input prices and a strengthening of Sterling against the Euro mean that the benefits are not as great as may be thought. Generic red meat: With a backdrop of poor economic conditions and growing health and environmental challenges from various sources there is a need to maintain the image of meat. The EBLEX division priority is to help the beef and lamb supply chains to be more efficient and to help the beef and sheep meat industry add value through improved marketing. For the milk sector in Great Britain British dairy farming faces considerable uncertainty in the future year or two. The major debate concerning milk contracts and milk pricing has instigated a widespread review of contract arrangements. Analysis shows a wide range in costs of production, independent of system and herd size. There are dairy farmers who are struggling to make money from milk production but equally there are other growing, confident and profitable dairy farming businesses in GB. The introduction of the EU dairy package, the possibility of producer organisations, along with the removal of the European quota system in 2015 means that in the next three years the way dairy farmers sell their milk and the markets they need to understand could change markedly. There is also increased interest from dairy farmers and milk processors in identifying and developing international markets for GB dairy products. Page 9 The DairyCo division priority is to improve the profitability of British dairy farmers through improvements in business management, environmental and economic sustainability and animal health and welfare, as well as maintain and improve consumers’ perception of dairy farming. For the horticulture sector in Great Britain With a continually expanding global market in horticultural produce, the British horticulture industry should be able to develop export markets, increase production and make a greater contribution to UK Gross Domestic Product. To do so will require state-of-the-art production methods and facilities, a highly educated professional workforce and a self-sustaining community of applied scientists and technologists capable of driving continual innovation and development through targeted applied research and knowledge transfer programmes. The priority of the HDC division is to work in partnership with growers, supply chains, the other principal research funders and trade organisations to deliver R&D and associated knowledge transfer and training needs that address the immediate needs of the industry, whilst also identifying and commissioning research that addresses the strategic priorities that will help ‘future proof’ the industry. For the cereal and oilseeds division in the United Kingdom Weather and disease pressures, increasing global demand for grain and the drive to secure sustainable production continue to pose long term challenges for the cereals and oilseeds industry. Over the last 12 months there has been increasing consolidation and strategic alliances, in the commercial sector in response to changing market conditions. Price volatility presents a challenge as well as a risk to UK arable farming businesses, so success will depend on farmers’ understanding of grain markets and price risk management. The HGCA division priorities are to improve the sector’s business decision making efficiency; improve its technical efficiency; improve industry competitiveness; and grow the market through development work at home and abroad. For the potato division in Great Britain The consequences of the many challenges experienced in 2012 will continue to unfold for some time to come. The purchaser base continues to consolidate; the crop is increasingly grown on contract to stabilise supply chain costs however, this market dynamic has been considerably strained by events in 2012. Innovation will be critical to increasing the yield per hectare within the land resource available while optimising inputs - growing more for less. Achieving this will require the uptake of new technology and best practice implementation within the supply chain (such as enhanced stewardship of CIPC), improved plant health to minimise losses and more efficient use of resources, to reduce costs and environmental impact. The priority of the Potato Council division is to deliver a sustainable and profitable potato sector through optimising resource and input use by addressing the apparent plateau in yield, improving storage efficiency, securing plant health and driving profitability and value in the supply chain. In the following pages we outline the key outcomes we are seeking to achieve through the successful delivery of our strategies. Page 10 CO1: Deliver value for money for levy payers in everything we do Delivering good ‘value for money’ to levy payers is a cornerstone of AHDB policy. AHDB is increasingly linking with other organisations to develop partnership working arrangements to the advantage of our levy payers and we also strive to secure grant/match-funding across a wide range of activities. This search for efficiencies includes improving our procurement of services and work not only to ensure good pricing but also, in the area of research and development, to ensure what we procure is most relevant to the needs of the industry (whether strategic or tactical), is managed effectively and delivers scientifically-robust and useful outcomes for our levy payers. Examples of work in this area for the 2012/13 year to date include: We have taken significant cost out of running AHDB. We have delivered savings of more than £3.8m in 2011/12 for the corporate administration and back-office costs when compared against the pre-AHDB levy board costs. A programme of activity in the beef and sheep supply chain to improve efficiency and sustainability in the post-farm gate chain, particularly amongst SMEs, is helping to identify ways to reduce waste, water usage and exploit opportunities for the fifth quarter - a recent UK project concentrating on the use of offal saw a £2.2 million cost of disposal turned into an income source of £13.3 million. The Agriculture and Horticulture Development Board (AHDB) has had four successes under the new Skills Framework funding of the RDPE, securing a total £1.7m skills of training funds for farmers and growers across the country (to be made up to £2.2m with additional industry match funding). This includesa £315,000 boost to our drive to develop skills in general animal health and welfare;, an additional £550,000 to further develop training and awareness in the fight to control endemic disease, with a special focus on Bovine Diarrhoea (BVD) and Scab; £280,000 for advanced training for farmers in livestock skills; and £490,00 for knowledge transfer of advanced technical skills in crops, including horticulture and tree fruit. The RDPE is jointly funded by Defra and the European Union. We have engaged with EU ‘Horizon 2020’ as a future source of research funding, taking a delegation of AHDB heads of R&D to meet with the EU Director Generals for Research and Agriculture. Our potato Grower Collaboration project has been running for over five years, bringing growers and researchers closer together to plan their agronomy. Adoption of best practice from our network of demonstration farms has resulted in potential savings in seed and fertiliser costs of up to £155/ha/yr. The eAML2 (electronic animal movements licensing) system was introduced to record and control the movements of pigs from farm to slaughter and from farm to farm. This new system reduces administration, improves efficiency and helps to manage the risk of disease spreading in the event of a major outbreak. Since 1 April 2011 HGCA has commissioned 30 new research projects attracting co-funding of £3.7m. Page 11 By using online and social media as the predominant platforms to launch the 2012 Farmhouse Breakfast Week, HGCA delivered a cost-effective consumer campaign with a return on investment of 33:1. Significant leverage was achieved by encouraging over 1,000 third parties to host Farmhouse Breakfast events. HDC has entered into negotiations to ensure that intellectual property generated by the HDC research programme will result in the commercial development of lateral flow diagnostic devices for early disease detection in key horticultural crops. Page 12 AHDB Strategic Plan 2013/16 Corporate Objective 1: Deliver value for money for levy payers in everything we do Core Strategies: Deliver scientifically-robust and 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; and continue to seek out ways to maximise the efficiency of AHDB operations (procurement, streamlining processes, board/committee/panel costs). Key Outcomes Owner Key Reporting Target Additional value generated for levy payers per £ of levy invested by tendering more programmes of work and leveraging our money through co-funded opportunities. HDC Work on at least three strategic research areas let by tender each year of the life of this Plan; year on year reduction in the number of projects commissioned while average project value increases year on year over the three years of the Plan. Potato Council is regarded by the majority of levy payers as providing good value for money and they actively engage in campaigns and programmes. Potato Council Shift levy payer awareness/value perception by 7% by 2015. HGCA’s work is clearly communicated and widely valued by the industry. HGCA Increase levy payer satisfaction score for identified key activities by 5% over the three-year period to 2016 as measured in annual stakeholder ‘intentions’ survey. More beef and sheep levy funds are able to be deployed on front-line activity that directly benefits levy payers by seeking out and exploiting the benefits of the AHDB framework by sharing services and finding synergies through working together. EBLEX 80% satisfaction rating for EBLEX published material measured in stakeholder ‘intentions’ survey and feedback forms. BPEX customers have a fuller understanding of the range of products and services that BPEX can provide individual businesses; and there’s more effective targeting of appropriate KT to different types of business including producers, AIG, vets and processors. BPEX Improve annual customer survey score to 1.75 (1 = excellent; 5 = poor). An R&D programme relevant to the GB dairy industry is commissioned and exploited. DairyCo Deliver R&D partnerships to time and budget. Drive cost reductions through improved procurement to ensure we get best value for money on the purchase of all goods and services and achieve the target of reducing AHDB support costs as a percentage of income by 1% year-on-year to 12%. AHDB Corporate Reduce support costs as a percentage of income by 1% year-onyear bringing it down to 12% by 2014. Page 13 CO2: Improve efficiency and productivity in the industry to help levy payers have thriving businesses It is clear the issues of agricultural and horticultural productivity (essentially, efficient land and resource use) should be a high priority for AHDB. This is also now being reflected in the national and international emphasis placed on issues of food security. Ornamental horticulture also has a positive role to play in the health and well-being of the nation. Improvements and innovation based on the translation of science into practice is the route to greater efficiency, competitiveness, profitability and sustainability for the agri-food and ornamentals sectors. Much can be achieved by the better and more widespread application of existing knowledge, some of which resides with practitioners as well scientific and technical experts. AHDB plays a pivotal role, across the UK, in getting science put into practice. AHDB will work with like-minded organisations to stimulate continued investment in use-inspired scientific research that is intimately coupled with well-integrated, well-directed approaches to knowledge exchange and the development of the necessary skills On a wider scale, AHDB has worked with other leading industry organisations to commission a report, 'Feeding the Future - Innovation Requirements for Primary Food Production in the UK to 2030’, which spells out the industry’s view on the research priorities for UK agriculture. This is due to be unveiled on 21 November 2012 and when finalised should be the reference manual for our policy makers and funding providers over the next two decades. Examples of work in this area for the 2012/13 year to date include: AHDB crop divisions (HDC, HGCA and Potato Council) have jointly funded work on insecticide resistance management in the peach-potato aphid, a key pest affecting both agricultural and horticultural crops and its management has to be viewed in a ‘cross-crop’ context. Twenty eight new cereal and oilseed varieties were added to the HGCA Recommended Lists in 2012 enabling growers to compare variety performance in areas such as yield, quality and disease resistance. 320 trials were funded across the UK and a mobile website was launched enabling users to access variety information through their smartphones. Our HDC division’s HNS Propagation Guide is a valuable reference for growers, bringing together a wealth of information on best practice in plant propagation for hardy ornamentals and nursery stock producers. We continued our popular horticulture sector work on Extension of Authorisation for Minor Uses (EAMU), ensuring growers have access to an effective and sustainable toolbox of crop protection products. We have achieved around 60 new re-registrations on crops ranging from plums to broad beans to outdoor ornamentals. HDC was instrumental in 2012 in working with many stakeholders to develop a strategy, plus background information, for spotted wing drosophila (SWD), a key new pest which attacks a very wide range of fruit crops. The CIPC stewardship programme has helped to protect the availability of this crucial potato sprout suppressant. Research in bulk potato stores had identified that the use of variable frequency drives for ventilation management reduces the risk of high CIPC residues. Page 14 Changes in weed control as a result of EU pesticide reviews would have resulted in additional costs to the potato industry of £13.5m p.a. Modified herbicide strategies derived from our Potato Council research have been evaluated and a conservative estimate of uptake of advice (based on 10% of Linuron treated area) shows that a £390k p.a. cost to the industry of additional hand weeding has been avoided. The DairyCo Healthy Feet Programme has developed well with good uptake across the industry helping dairy farmers to reduce and control lameness. A national Pig Health Improvement Plan has been introduced in England (with RDPE funding). This helps groups of producers manage pig disease at a local level while having a national impact. Locations of farms have been mapped and an assessment made of disease status. The safety of pork and pork products is a constant priority for the industry. BPEX continues to play a leading role in coordinating the ZNCP (zoonosis national control programme) initiative that includes industry, government and its agencies. HGCA facilitated cereal/oilseed growers and supply chain businesses coming together at 15 ‘Meet the Processor’ events to discuss issues such as product specification, supply sources and varieties in a non-contractual setting. DairyCo Breeding+ evaluations are now delivered using genomic data, improving the accuracy of breeding values. The potential for increased rates of genetic gain using genomics is a step closer to being realised. Top commercial sheep breeders using estimated breeding values (EBVs) are seeing an average benefit of £4 per lamb. The top beef breeders using EBVs are seeing an average benefit of £48 per head. Page 15 AHDB Strategic Plan 2013/16 Corporate Objective 2: Improve efficiency and productivity in the industry to help levy payers have thriving businesses Core Strategies: Deliver efficient knowledge transfer/exchange programmes based on evidence both from third party science and/or our own targeted R&D. The aim is to achieve increased sustainability for the industry as a whole by reducing costs; increasing yields sustainably; improving quality and optimising use of inputs; and encouraging benchmarking to help levy payers identify areas for business improvement. Key Outcomes Owner Key Reporting Target A sustainable crop protection toolbox is available for growers to use and there is increased uptake of Integrated Pest Management in protected crops. HDC Increase year-on-year cost/benefit ratio resulting from uptake of specific EAMUs by the industry. Increase sales of biocontrol products as evidenced by EU survey data. Ongoing R&D projects and communication to the industry achieve their planned and stated outcomes and deliver a combined impact on yield improvement. Potato Council Marketable yields improve by 5% over 5 years with more efficient use of inputs to maximise returns. Technical efficiency means the best possible value for money is provided in research investment. HGCA From an evaluation of the R&D programme against a 2010 baseline, deliver a 5:1 cost/benefit per crop tonne from HGCA-funded R&D. Sheep and beef producers are more efficient and more environmentally sustainable through the delivery and uptake of innovation and technical solutions on-farm from research and development programmes. EBLEX Improved carcase weights. Also, improved carcase weights for beef measured against the age of slaughter by looking at kg carcase per day gain, both measured on a three-year rolling average. Communicating new and existing knowledge on pig production techniques which results in individual businesses changing their behaviour to improve pig physical performance and delivers 27 weaned pigs per sow per year (Target 27). BPEX Deliver Target 27 (27 pigs weaned per sow per year) as measured through national herd recording. Knowledge transfer services effectively delivered to GB levy payers in an appropriate, differentiated way. DairyCo Face-to-face delivery with 4,200 dairy businesses that contribute milk levy. An integrated data management system enables AHDB teams to streamline project management, communication channels, and improve customer segmentation and targeting. AHDB Corporate Scope, design and deliver an AHDBwide Project Management System by 2013 to enable effective ‘birth to death’ commissioning, resourcing, accounting, running and assessing research and other projects. Page 16 CO3: Improve marketing in the industry to help profitability and customer awareness In sectors where there is a specific requirement, AHDB undertakes export market development and works to inspire and inform consumers in order to assist the economic viability of those sectors. It also helps the industry respond to factually incorrect/unjustified criticisms. Examples of work in this area for the 2012/13 year to date include: Following an extended period of frost in GB and challenging unrest in North Africa our Potato Council division conducted emergency trade missions to Egypt in conjunction with Scottish Government. We negotiated an extension to the usual trading window which resulted in an extra £670K worth of trade into the region and helped our potato industry achieve in excess of 100,000 tonnes of seed exported. A special dairy sector report was commissioned and published in 2012 examining the opportunities for more dairy exports from GB. Our BPEX division assisted English exporters to achieve consistent growth in both the volume and value of pork and pork products exported. Since 2009 exports have increased by 38% in volume and 48% in value. BPEX has worked with UK government to secure the opening of important markets such as South Africa and China. The first export mission was made to Algeria, a key target market for UK cereals. Algeria also took part in HGCA’s Bread Baking Workshop, which gave delegates from countries with a potential 20 million tonne milling import requirement the opportunity to bake their national breads using ukp and uks wheat. Our EU co-financed campaign has allowed Potato Council to increase its investment in educating and inspiring younger consumers (25 – 44) with 49% stating that the campaign has encouraged them to eat more potatoes. It has delivered £10 of media coverage for each £1 invested and in total delivered 54 million opportunities to see the campaign message. Beef and sheep producers receive between 5% and 15% premium through branding such as QSM and Red Tractor, which equates to between 13p and 40p per kg deadweight. The average premium was approximately 25p per kg dwt. The promotion of Red Tractor pork and pork products has been vital in seeking to defend the price premium for English pork and pork products, despite the pressure from the movement in the value of Sterling. Successful campaigns have included British Sausage Week, Bacon Connoisseurs Week, Pigs are Still Worth It and the campaign to highlight the impact on the market of the EU ban on the use of sow stalls from 1 January 2013. The use of isotope analysis as a means of enhancing traceability and auditing of Red Tractor pig meat has been completed. This will now move into regular use starting with chilled and frozen pork. Our HGCA division has facilitated an industry-wide project to look at the feasibility of moving the current paper based grain passport to an electronic system. This paves the way for an improved flow of information between growers, buyers and processors. Page 17 Evidence about the value of potatoes for the health of the nation and as a sustainable food crop for Britain has been developed to improve the positive messaging of potatoes to consumers. This is being shared with stakeholders to assist them in developing their communications. The consumer-facing website www.thisisdairyfarming.com, continued to achieve Google 1st page search rankings as it helped the industry communicate factual, accurate and positive messages to inform consumers about dairy farming in Britain. Over 200 delegates including leading businesses and policy makers attended HGCA’s 2012 Grain Outlook Conference, in October, to hear AHDB give the first comprehensive overview of the 2012 season. Delegates also heard experts speak on the Eurozone crisis, the global importance of this year’s US maize crop, the impact of China on world grain markets and the accuracy of weather forecasting. Videos of the 2012 conference were posted on HGCA’s You Tube channel, where last year’s presentations were viewed over 3,500 times. HDC has continued to assess the role it may play in improving the provision of market intelligence to the industry, and has started gathering its own data to enable trends in the industry to be better identified. Page 18 AHDB Strategic Plan 2013/16 Corporate Objective 3: Improve marketing in the industry to help profitability and customer awareness Core Strategies: In sectors where there is a specific requirement, undertake export market development and work to inspire and inform consumers and so assist the economic viability of those sectors Key Outcomes Owner Key Reporting Target The key production trends in the horticulture industry are identified. HDC Provision of information on key trends in production. GB industry profitably supplies consumers with a range of potato products that consistently deliver distinct taste and cooking characteristics, recognised and valued by shoppers. Potato Council 3% shift in consumer (25-44 year olds) awareness that potatoes are not all the same by 2014. Improved business decision making and profitability in the industry. HGCA Deliver a 5% increase in proportion of crops grown for specific end markets, including exports, over the three year period to 2016 as measured in the annual stakeholder ‘intentions’ survey. Improved profitability and customer awareness within the industry through successful communication of the health and nutritional benefits of beef and lamb, the identification of quality assurance to aid consumer choice, and the maximising of carcase value at home and on global export markets. EBLEX Sustain percentage of lamb exports at 35% and beef exports at 17%. As a result of marketing activities, the retailer stocking and identification of Red Tractor pork/bacon/ham rises; and consumer understanding of the core values of Red Tractor Pork improves. BPEX Consumer understanding of Red Tractor Pork core brand values to rise by 10% measured by consumer research. Accurate and timely information on markets, inputs and prices is available DairyCo Publication of milk price league table for 50 contracts each month. Raised awareness among AHDB stakeholders of how AHDB is helping to successfully make agricultural and horticultural businesses more competitive and sustainable. AHDB Corporate Increase combined Market Intelligence publications circulation from 24,700 to 27,250 per month. Page 19 CO4: Improve services that the industry provides to the community This covers two main areas of work for AHDB: Skills development; and the dissemination of information we gather and analyse to better inform all players within the industry, allowing them to make better business decisions. On the information front, we are a knowledge house for our industries producing essential pricing, statistics and market analysis to assist in market transparency and business decision making. We target our information to producers, supply chains, health professionals, the education sector and the media. On a wider scale, the thrust of all our workstreams, to deliver more efficient, profitable and sustainable agricultural and horticultural businesses, has a positive knock-on impact on our rural communities. Examples of work in this area for the 2012/13 year to date include: Our Milkbench+ team produced a report in January 2012 based on data from 350 farmers in 2010/11. The report used evidence to debunk some often quoted “facts” about milk production. The report showed that profitable milk production can be achieved at any herd size and any yield per cow. It also showed that in all systems there was a wide range between best and worst performers. Good quality impartial market information is vital to the efficient operation of the pig meat market. We improved the availability and timeliness of market information through the BPEX website and also delivered a major overhaul of pig price reporting and especially the DAPP (Deadweight Average Pig Price). The targeted market information collected in the UK and EU market surveys is estimated to have a potential value to the beef and lamb industry of up to £8.75 million per year. The milk price debate in the summer of 2012 meant our evidence-based analysis of a difficult dairy market situation was widely used by media outlets, stakeholder organisations and individual levy payers. We launched the AHDB Education strategy, which takes a long-term approach to educate the next generation on food and farming through joint AHDB activity aimed at primary and secondary schools, teachers, education professionals and parents, that also better aligns this activity with other education programmes in the industry. Over 14,300 schools took part in our Potato Council primary education programme, reaching nearly 500,000 children. The cost to reach each child was just 33p for 14 weeks learning about potatoes and trying out their freshly dug crop. A series of four teacher conferences, attended by 110 teachers, were held across the UK during the year with the millers’ organisation nabim. These events highlighted the online educational resources available through www.grainchain.com. AHDB is developing a skills strategy that dovetails with other industry initiatives and coordinates external skills development across all our six sectors. Page 20 HGCA continued to support skills upgrading and careers development within the industry through its sponsorship of 18 PhDs and student bursaries and involvement in Careers in Farming and Food Supply. Our accredited HGCA meetings and events for crop production and protection have up-skilled agronomists, advisers and farmers, enabling them to collect more than 80 BASIS and 25 NRoSO points. Our HDC division has extended our Fellowship programme in horticulture by reaching a cofunded agreement with the Royal Horticultural Society to develop underpinning research expertise in delivering high quality plants grown in sustainable substrates, with efficient water use and novel nutrient sources. This is in line with our commitment to ensure that appropriate research expertise continues to be available to the horticultural industry. We have also introduced a student bursary scheme to encourage undergraduates into broader employment opportunities in horticulture. HDC launched its Twitter feed in May 2012 to help signpost events and other activities. HDC currently has 250 followers. Funded by DairyCo and residual Milk Marketing Board funds, working with an industry steering group, we have set up Dairy Pro, a continuous professional development scheme that enables dairy farmers and their staff to get recognition for developing their skills and achievements in their profession. The project will be self-funding after three years. EBLEX Business Pointers has highlighted that top third producers can be performing nearly 66% more effectively than average producers. Page 21 AHDB Strategic Plan 2013/16 Corporate Objective 4: Improve services that the industry provides to the community Core Strategies: Give levy payers and the wider industry access to unbiased, high quality market information; raise awareness of food and where it comes from among school children; give health professionals a better understanding of the health and nutritional benefits of levy payer-produced foods in the diet; and help ensure the agriculture and horticulture industries are able to develop and attract workers with the skills needed to operate effectively. Key Outcomes Owner Key Reporting Target Delivery of postgraduate training for potential entrants into the horticultural industry. HDC Delivery of six Fellowships over the next three years and start-up of four new PhD studentships per year. To have an educated next generation of Potato consumers: connecting them with their food, Council giving them the skills to prepare potatoes and improving attitudes to potatoes as a healthy and sustainable choice. Reach 0.5 million primary school children at a cost per child of 29p (12% lower cost than 2012/13). Sustainable demand for UK cereal and oilseed products maintained through clear communication of their benefits and value. HGCA 10% increase in website visitors accessing key information over three year period to 2016. Industry players have greater understanding and are able to make better informed business decisions as a result of the wider dissemination of and greater access to beef and sheep market information. EBLEX Generate at least 500,000 views of market information pages on the EBLEX website each year. The diverse needs of the pig industry are better reflected in the suite of skill development packages; external funding enables wider delivery of skills development to English pig producers; and new entrants are attracted to the industry. BPEX 1000 members of the industry actively engaged in training and skills development annually. Consumers have access to balanced information on GB dairy farming through the provision of a consumer website thisisdairyfarming.com. DairyCo First page result for internet search engines for relevant search terms. An AHDB-wide skills strategy that dovetails with other industry initiatives and helps coordinate external skills development. AHDB Corporate Delivery of an AHDB skills strategy. Page 22 CO5: Improve ways in which the industry contributes to sustainable development ‘Sustainability’ is recognised as being important for future generations and it is part of farming culture to want to nurture the land and hand down a viable business to the next generation. According to the Foresight report, a sustainable future will demand more food production with less land, water, emissions, energy and waste. The UK has the potential to show the way by virtue of its resilient soils, a sufficiency of water, a warming climate and a high level of intellectual capacity and innovation. Truly sustainable systems of production based exclusively on renewable products and practices are still somewhat distant. However, advances in engineering, information technology and bioscience are moving us in the right direction. A key factor for adoption of new, more sustainable practices is that they need to be either cost-neutral or generate a cost-benefit to the agricultural/horticultural enterprise. AHDB divisions are working on R&D and KT strategies to ensure we are able to provide new information on soil and water management that allows farmers and growers to meet compliance targets and minimise any impact on productivity. Examples of AHDB work in this area for the 2012/13 year to date include: AHDB continued its commitment to the industry Greenhouse Gas Action Plan consortium, helping to report on milestones and delivering the ‘Farm Efficiency Hub’ pilot. HGCA contributed through the production of the first greenhouse gas emissions roadmap for cereals and oilseeds. AHDB joined forces with Catchment Sensitive Farming (CSF) to provide farmers and growers with information on the latest research and best-practice on soils at a local level. From July 2011 until March 2013 AHDB and CSF are jointly running more than 70 events, with a focus on soil and nutrient management. Our DairyCo division has taken the lead in the industry on measuring GHG emissions from dairy farms by committing to funding the measurement of average GHG emissions from a statistically robust selection of farms. Data from 415 farms was collated and analysed giving a national benchmark for grammes carbon equivalent per litre of milk produced for the last two years and will be repeated in 2013-14 to examine seasonal variation and/or progress. Our HGCA division contributed to Natural England’s Catchment Sensitive Farming initiative and the industry’s Greenhouse Gas Action Plan, through production of the first greenhouse gas emissions roadmap for cereals and oilseeds. Our HDC division has continued to deliver an integrated approach to energy efficiency in protected horticultural crops via its GrowSave programme of work. Delivery routes to the industry included a one-stop-shop website (www.growsave.co.uk), focus nurseries for on-site demonstrations, energy training workshops, an annual conference and printed Energy News updates. HDC has continued to commission and deliver projects that aim to increase water and nutrient use efficiency in crops with high embedded water, such as strawberry and raspberry. Page 23 Managing energy costs is vital to the sustainability of businesses. Our Potato Council division’s surveillance trials and on-line comparisons have revealed a wide range of potato storage costs and the reasons behind this have been assessed in detail. Sealing, fridge performance and airflow offer scope for cost reductions of up to £6/tonne. In addition to commissioned research (£480K investment over 8 years) on the integration of precision irrigation and non-water based measures to suppress common scab, Potato Council published guidance ‘Managing the Risk of Common Scab’ to promote efficient use of irrigation and reduce losses, supported by in-field events. Our work shows that an estimated 14mm of irrigation could be saved by more carefully targeted irrigation during the common scab control period, which equates to potential savings of up to £2.2 million over the total planted area. Our HGCA division has published its Farm4Bio Guide, the results of a £1 million five year project to look at ways of enhancing the biodiversity of uncropped land. EBLEX work shows the benefit to the economy of using available agriculture landscape for beef and sheep stands at £63.8 million per year, rising to £0.9 billion when considering the wider landscape. AHDB contributed at multi-levels to the Defra Green Food Project, including delivering a series of detailed case studies on wheat and dairy working in partnership with other stakeholders. Page 24 AHDB Strategic Plan 2013/16 Corporate Objective 5: Improve ways in which the industry contributes to sustainable development Core Strategies: Further develop sector-focused environmental industry roadmaps in partnership with other industry organisations and help explain and deliver the roadmaps and also the targets in the industry Greenhouse Gas Action Plan – focusing on water, soils, fertilisers, pesticides, waste and greenhouse gases. Key Outcomes Owner Key Reporting Targets A review of current knowledge and priorities in strategic areas including soils and growing media; crop protection and resource use efficiency are completed by the end of 2014/15; and specific follow-up research commissioned as required. HDC Complete the knowledge and priorities review and share/discuss outputs with industry to inform development of project tenders for future work. Potato industry is recognised as delivering on Potato the sustainability agenda. Council The long-term sustainability of the cereal and oilseeds sector is promoted through the delivery of the sectors Environmental Roadmap as part of the Greenhouse Gas Action Plan. HGCA EBLEX Delivery of ways to measure and reduce onfarm carbon; utilisation of modelling of costs of production; plus improved waste reduction, water usage and exploitation of fifth quarter opportunities by SMEs post-farm gate. Eight potato supply chains recognise Potato Council’s contribution to achieving their sustainability targets. Increase the proportion of research projects which include environmental improvement factors. Audit 60 farms to establish the carbon footprint and monitor for 3 years for improvement in response to changes in management and performance. Improvements achieved by the pig industry in climate change, eutrophication, acidification and abiotic resource depletion through delivery of the English pig industry environmental roadmap. BPEX Improve GHG equivalent impact of pork production by 4%. Measurement and reduction in carbon cost per kg of milk produced across all production systems. DairyCo Carbon measurement of 400 farms and publication of results by March 2014. The industry meets the targets for GHG emissions reduction that have been set within the industry Greenhouse Gas Action Plan. AHDB Corporate Work with partner organisations (NFU, AIC, CLA and others) to develop and deliver advice for onfarm actions aimed at delivery of the targets for GHG emissions reduction that have been set within the Industry GHG Action Plan. Page 25 Funding the Plan Funding the Plan The work of AHDB is funded by a statutory levy (a parafiscal tax) paid by farmers and growers and others in the supply chain. AHDB is legally responsible for the collection of these levies. The forecast total net levy for 2013/14 amounts to just under £54m and this is supplemented with grants and other income forecast to be in the region of £3.1m. The funds raised from each commodity sector are ring-fenced to ensure they can only be used to the benefit of the sectors from which they were raised. Industry Sector Pigs in England Beef and Lamb in England Milk in Great Britain Horticulture in Great Britain Cereals and Oilseeds in UK Potatoes in Great Britain Grants and other income Total net income Forecast net levy 2013/14 £8.040 m £15.450 m £6.820 m £5.913 m £11.437 m £6.210 m £3.150 m £57.020 m The sector boards, on an annual basis, recommend the levy rates that should be applied across their sectors in order to fund the strategic work programmes outlined in this Corporate Plan and explained in more detail in our divisional business plans. The main AHDB Board assesses the recommendations from the sector boards and subsequently proposes the annual levy rates for approval by Ministers in Defra and Devolved Administration. This Plan contains no levy rate increases for 2013/14. The levy rates for April 2013 to March 2014 can be found on page 27. Page 26 AHDB Levy Rates 01/04/13 to 31/03/14 The recommended levy rates remain unchanged from the current 2012/13 rates. SECTOR Levy rate 2012/13 Levy rate 2013/14 Pigs (England) Producer Slaughterer/exporter of live pigs Beef and Lamb (England) Cattle (excluding calves) Producer Slaughterer/exporter of live cattle Calves Producer Slaughterer/exporter of live calves Sheep Producer Slaughterer/exporter of live sheep Milk (GB) Buyers and direct sellers of milk Cereals and oilseeds (UK) Cereal grower Cereal buyer Cereal processor (human and industrial) Cereal processor (feed) Oilseeds Horticulture (GB) Horticulture products Mushroom spawn - Agaricus - Non-agaricus Potatoes (GB) Potato growers £ per head 0.85 0.20 £ per head £ per head 0.85 0.20 £ per head Higher rate for late payment £ per head 0.935 0.22 £ per head 4.05 1.35 4.05 1.35 4.05 1.35 0.08 0.08 0.08 0.08 0.08 0.08 0.60 0.20 Pence per litre 0.060 Pence per tonne 46.00 3.80 9.50 0.60 0.20 Pence per litre 0.060 Pence per tonne 46.00 3.80 9.50 0.60 0.20 Pence per litre 0.066 Pence per tonne 50.60 4.18 10.45 4.60 75.00 % sales turnover 0.50 Pence per litre 8.0 2.0 4.60 75.00 % sales turnover 0.50 Pence per litre 8.0 2.0 5.06 82.50 % sales turnover 0.55 Pence per litre 8.8 2.2 £42.62 per hectare Purchasers of potatoes £0.1858 per tonne £42.62 per hectare £0.1858 per tonne £48.08 per hectare £0.2076 per tonne Page 27 Budgets The following pages contain the 2013/14 budget estimates for AHDB and its subsidiary, MLCSL, split between each sector. The reports also show indicative budget plans for the following two years. This final budget was agreed at the AHDB Board meeting held on 26 March 2013. The table below shows how the forecast levy collected from each commodity sector in 2013/14 will be deployed across the core activity areas of R&D and knowledge transfer/exchange, trade development, international, supply chain integration, market intelligence (e.g. pricing and other business information), communications and support services (IT, finance, legal, HR, etc). This helps to demonstrate the different priorities across the sectors and is presented as a percentage of the overall income ring-fenced for that commodity sector. The last two lines in this table show if a sector is running a breakeven budget (i.e. total expenditure = 100%), a surplus budget (i.e. total expenditure is less than 100% and the surplus is going to build back up reserves), or a deficit budget (i.e. total expenditure is more than 100% and the extra funds are being drawn down from reserves). Overall in 2013/14 AHDB is budgeting to deliver a small surplus at the year end. Page 28 Page 29 Page 30 Page 31 Page 32 Page 33 Page 34 Page 35 Page 36 AHDB Office Address Agriculture and Horticulture Development Board Stoneleigh Park Kenilworth Warwickshire CV8 2TL Email: info@ahdb.org.uk Tel: 0247 669 2051 Web: www.ahdb.org.uk Page 37