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Potter's View: AHDB's credibility is hanging by a thread

Insights

This month, Ian Potter looks at the role of AHDB Dairy, whether its activities are of relevance to most dairy producers, and indeed whether it is being fully accountable to producers in the way it spends its multi-million levy funds.

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AHDB Dairy as it is called now, and indeed AHDB itself, are certainly copping some criticism at the moment. And so far as the dairy sector is concerned, their stance appears to be one of evading those who challenge them, including some dairy farmers.

 

One issue raised with me by several farmers is that of David Ball, who was made redundant as manager of a large Gloucestershire dairy unit last year.

 

After being unemployed for a while, however, he now has a position with AHDB Dairy as its farm buildings senior technical adviser – effectively working under his wife Amanda. The job specification stated AHDB was ‘seeking an experienced person on buildings’, which he may well be, but his LinkedIn profile shows no specific reference to this.

 

This prompted me to make enquiries to establish the background to the appointment in terms of how many applications and interviews there were. The response I received was: “It’s not information we would normally disclose”.

 

When I responded, asking whether the position had been advertised in Farmers Guardian, Dairy Farmer, Farmers Weekly or the like, my two requests were ignored.

 

The appointment may ultimately be a case of AHDB delivering value for money and working smarter, only time will tell. But aside from this, there’s also the issue of the actual job. Employing an expert in buildings right now has been described to me as hiring an expert on how to blow out candles on a birthday cake while the house burns down.

 

A number of farmers desperately need one-to-one help on how to exit the industry, or to involve fresh blood in their businesses. Help here would be very useful.

 

On top of Mr Ball’s appointment comes another job vacancy for an extension officer with expertise in forage and grassland management, another in market intelligence, and yet another senior one in AHDB strategy (Tom Hind).

 

AHDB Dairy now employs well over 30 people I reckon, with the chairman on a pro-rata salary of more than £80,000 a year. AHDB’s credibility is hanging by a thread among a lot of farmers who say it sits in its new ivory tower in Stoneleigh spending levy payers’ money on what it thinks is needed rather than on what levy payers actually want. In fact some of its work is turning out to be deeply damaging.

 

For example, its August research informed farmers ‘there is very little connection between the price of milk in supermarkets and the price farmers are paid’. According to AHDB Dairy this ‘supports the argument the supermarket price war on milk is not to blame for the current crisis’.

 

Really?

 

So there’s no connection between the amount of money that comes in the top of the hopper and the amount that goes out the bottom? And if the retailers feel guilty enough to throw some more money at farmers now, then they must, by their own admission, be part of the problem.

 

If I were a retailer I’d have thrown AHDB’s line back at the farmers and not paid anything. Indeed you would have expected the British Retail Consortium, which represents retailers, to have done such research in an attempt to break the link and derail the work of the likes of FFA. Then there’s its latest August Cheddar price at a jaw dropping average of £2075/tonne – down 8.8% in one month.

 

I tried to obtain clarification from two of its senior dairy analysts as to how such a low price had been calculated. I gave them a list of UK cheese traders asking them to confirm who they had contacted, how many tonnes they said had been traded (eg one tonne or 1000), how the average had been calculated, and exactly what question had been asked? And the response: “It’s commercially sensitive information, however, AHDB does consult other publications to ensure its £2075 figure is true.”

 

For what it’s worth, my research showed a significant tonnage of retailer contracted mild cheese is selling at £2300/tonne, up to £2500/tonne, while, yes, some spot trades are below £2000. But I just can’t come near to a £2075 average. In fact, the EU average price is quoted as £2175 or £100 higher – and our cheese is far superior to EU stuff. David Handley and Michael Oakes (the two chief negotiators for UK dairy now) need all the help they can get in negotiating prices, and they do not need overly low figures undermining their efforts.

 

The next eyebrow raiser involves Promar, which has been awarded a contract to collect data to provide costings. Why? This is duplication and, to my mind, AHDB Dairy is spending the money because it has it to spend. After all, we have TSDG, Sainsbury’s, Kite, Kingshay and Promar all doing costings.

 

There is no market failure for AHDB to address. And besides, if it comes out with costings less than Tesco and the others, or does anything to undermine the work of FFA and NFU, there will be even more hell to pay. Private Eye touched a few raw nerves recently and highlighted the concern among farmers as to how AHDB spends its £65m a year budget.

 

The article questioned whether it has outlived its usefulness, with a third of the money going on staff salaries, and one farmer having described it as ‘a lucrative gravy train’. Levy payers (and I am one) have a right to challenge the cost and the benefits, and AHDB has a duty to respond. It has a lot of work still to do to convince levy payers it is fit for purpose!

 

STATEMENT: In a statement, AHDB said David Ball’s title was ‘Technical Extension Officer Buildings, Slurry, Milking Equipment and Cow Flow’, that he had participated in a ‘competitive and robust appointments procedure’, and that ‘there is no line management link’ to Amanda Ball.

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