Consultation launched as Potato Council proposes levy hike over next three years

The Potato Council is proposing to increase its levy for the first time in nine years and has launched a consultation exercise to ask growers' views on the plans.

The proposal was announced in the Agriculture & Horticulture Development Board's (AHDB) corporate plan, which was launched last week (20 November). It spells out the board's plans from April 2010 to March 2013.

While the Horticultural Development Company has no plans to raise its levy for the next few years, the Potato Council is proposing to increase its levy by three per cent each year for three years, to a grower levy of £40.17/ha - or an increase of £1.17. The planned increase, made by the potato board members, was first reported in the 2009 corporate plan.

Potato Council chairman Allan Stevenson told Grower that, until now, the Potato Council had been able to live off its reserves but the increase was needed to ensure that it does not go into debt.

"This additional funding is essential to avoid deficit," he said. "There have been huge changes in our industry over the past 40 years. Grower numbers have reduced from 60,000 to around 2,000 in 2009, yet production remains at a similar level. But we have a shrinking customer base so there are massive concentrations in the industry and it becomes more and more difficult for growers to be in the business."

Stevenson added that the levy increase will benefit the industry because it will enable the council to invest in R&D, knowledge transfer and marketing activities - all of which will be stepped up to address the industry's specific needs.

"The key focus is on growers and their input costs. R&D will have a key role to play in that area."

He told Grower that there are plans to rebuild the council's storage unit at Sutton Bridge Experimental Unit in Lincolnshire to develop storage research. The rebuild will cost some £600,000, with half of the funding sourced from local development agencies.

Stevenson said: "The (corporate) plan demonstrates high activity in key areas most needed by our industry and builds on the significant benefits we have already delivered to levy payers.

"Potatoes are not easy to grow and face an endless barrage of disease threats, storage challenges and market opportunities and threats. On the crop production side, the industry's needs are driven by plant health, regulation, energy saving, soil, water and pesticide use. Marketing activities will continue to focus on the benefits of potatoes over carbohydrate alternatives and particularly on encouraging younger people to recognise those benefits."

He added that the proposed increase is "modest" because it will result in growers paying less than 3p/tonne more, based on an average yield. "The formation of the AHDB and the cost savings this is starting to deliver has allowed us to propose a modest increase.

"If we had applied inflationary increases over the past eight years, during which time the levy has been static, it would be 27 per cent higher in 2010 than what is proposed."

The proposal has been put out to consultation by the AHDB and growers have until 4 January 2010 to respond. See their website.


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