Apple and pear levy 'lacks logic', says HDC

The new apple and pear levy turnover threshold of £60,000 is a "travesty" and should be lowered to £20,000, according to latest research.

The conclusion was reached by Sean Rickard of the Cranfield School of Management, who carried out a study for the Horticultural Development Company (HDC) after the new levy calculation method caused frustration among growers.

From last year the levy was based on the size of growers' turnover instead of the size of orchard areas. This higher threshold raised the number of growers not paying a levy from 17 per cent to 53 per cent.

But Rickard argued that the new threshold "lacks logic". He said: "The logic of a threshold of £60,000 is not clear and I have not found a coherent explanation."

He has proposed that the levy should be reduced to £20,000 - a sum that is currently equivalent to the old threshold of 2ha.

"This is broadly in line with the previous area-based levy threshold of 2ha and the levy raised would exceed the costs of collection," said Rickard.

"This would result in practically all commercial apple and pear growers paying a levy and the additional revenue raised would be significant - an increase of between 10 and 18 per cent for the HDC."

He added: "I have received some strong support for cutting the threshold to £20,000."

Rickard has also proposed nipping the deductions systems in the bud, claiming they "add complication and cost to the levy system and are also a source of inequity".

Deductions can help reduce the levy for growers and include the cost of packaging, haulage of fruit off the farm, commission on sales, plant material such as trees and processing as for apple juice.

Rickard also said there was evidence that growers are abusing this system by "game-playing". This was reported in Grower last June, when growers had to complete their return for the new levy. Many filled in the form incorrectly in protest to the changes.

Rickard remarked: "Deductions cannot be made more equitable without greatly increasing the costs and complexity of the system - for both growers and administrators - and therefore the alternative of ending the system of permissible deductions is proposed.

"This would reduce the time and effort devoted to calculating levies. It would remove much of the scope for game-playing and the system would be more transparent and equitable. It would also reduce collection and administration costs."

HDC technical manager Andrew Tinsley told Grower that Rickard's recommendations will now be discussed "within the wider horticulture industry" before the Agriculture & Horticulture Development Board decides whether to approach Defra about changing the system.


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