The proposed new levy would mean an increase of 93p/head of cattle to £5.50p, 13p per lamb to 80p and 21p/pig to £1.26p. Of that, the producer will pay 70.5p/head of cattle, while the processor will pay 22.5p, with the split between farmer and abattoir being 60p and 20p/lamb and £1.02 and 24p/pig.

The new rates would become effective from April 1, 2010, subject to approval by Cabinet Secretary for Rural Affairs Richard Lochhead and remain fixed for a three-year period.

The move follows an eight-year freeze in levy rates for cattle and sheep, while the rate for pigs hasn’t altered since 1997. Over the past eight years prime steer, sheep and pig prices have all increased by a consistent 58%.

QMS chairman Donald Biggar told farming journalists inflationary erosion, coupled with a decline in overall livestock numbers, has led to a reduction in levy income.

Income from levy in 2008/09 was down to £3.9m compared with £4.2m in 2007/08 with estimated income for 2009/10 £3.7m.

Another loss of income, worth £1m/year, occurs as a result of Scottish lambs being slaughtered south of the border, when the levy is paid to the country in which they are killed. QMS intends to pursue the repatriation of those funds and has been discussing this approach with its sister organisation in Wales.

QMS chief executive, ’Uel Morton, pointed out that for every £1 of cash which QMS received from levy-payers during the year, a further 24p was leveraged from sources such as the Government and Europe through co-funding. A good example of this leverage is the news QMS is the only meat organisation in Europe to secure a major EU grant, worth €1.25m over the next three years, to support its Scotch Beef and Scotch Lamb marketing activities.

“Even with this EU cash injection our marketing budget this year is down £630,000, and we are now facing difficult decisions on the future allocation of the available resources,” said Morton.

QMS will host open meetings in November to engage with the industry on its plans for future activities.

l The exchange rate to be used for the 2009 Single Farm Payment scheme is £0.9093 per euro, representing a cash value increase of around £88m for Scottish farmers.