Former St Boswells mart boss Jack Clark is calling for ‘bizarre’ rules branding Scottish meat as British to be changed.
A red meat levy – a fee paid per head of animal – goes to government bodies to promote the industry.
But the money is allocated according to where the animal is slaughtered.
Most Scottish lamb and pigs are now slaughtered in England with the levy going to UK government coffers.
And that means the Scottish Government’s promotional body, Quality Meat Scotland (QMS), is losing out on some £1.4million.
A director with Scottish Borders Chamber of Commerce (SBCC), Mr Clark is calling for the cash to come back north and be used to support QMS instead.
He said: “Frankly, the current situation is bizarre. It’s discriminating against Scottish – and in particular, Borders – producers.
“This is Scottish quality meat – born in Scotland, raised in Scotland and taken from Scotland only for slaughter.
“It’s only fair that the money should be used to promote our fantastic meat products throughout the UK.
Mr Clark said that the closure of Vion’s meat plant at Broxburn just outside Edinburgh last year exacerbated the problem of lack of slaughter and processing facilities in Scotland.
“This has been a problem for years, but it’s becoming more serious”, he added.
“The First Minister has recently written to the Prime Minister about the iniquities of the present levy system and that’s clearly helpful – it’s good to see he’s on our side.
“In addition, Richard Lochhead, the Cabinet Secretary for Rural Affairs, is applying considerable pressure to Defra, the department responsible in Whitehall, over this.”
Mr Clark added: “In total, Scottish farmers are losing about £1.4 million a year.
“That money should be going to help promote our excellent Scottish meat – including, of course, that produced in the Borders, where agriculture is a vital industry.
“Changing the scheme wouldn’t be difficult with the traceability systems the livestock industry has in place – it would just involve tagging the levy on to the animals’ country of birth, rather than where they are slaughtered.”
He estimates only half of lamb born and raised in Scotland is going under a Scottish label, with the rest being marketed as British.
And he describes the Borders as “a very prominent supplier” of lamb, adding that there is huge demand for the local produce in England.
Mr Clark and SBCC are also pressing for a fresh look into the feasibility of opening and financing a small-scale abattoir in the Borders.
They said it could help boost the local rural economy.
The last Borders abattoir was in Galashiels and it closed in 2011.