Defra seeks 'reformed' AHDB levy, despite industry vote to end payment + REACTION

The UK Government and devolved nations are seeking views on proposals for a reformed Agriculture and Horticulture Development Board (AHDB) "to deliver greater accountability and value for money for farmers across the UK".

AHDB logo
AHDB

The consultation follows ballots early in 2021 in the horticulture and potato sectors which resulted in a vote to end the statutory levy in both two sectors.

The consultation proposes:

  • To end the statutory levy in the horticulture and potato sectors from April 2022. The Government and the Devolved Administrations remain open to exploring industry-led proposals for the AHDB to deliver research and market development activities through a range of other funding methods, such as voluntary levies, commercial agreements or new statutory levies where there is widespread support for this; and 
  • To allow levy payers in other sectors a greater say on how the levy is spent, through a vote on sector plans every five years. The AHDB has committed to delivering the first vote on sector work programmes in the Spring of 2022.

The consultation runs for 7 weeks from 17 November 2021 to midnight on the 10 January 2022. 

Defra said: “Our proposals for a reformed and more accountable AHDB respect the outcome the horticulture and potato ballots and sit alongside improvements already underway to deliver a more efficient organisation, and better value for money for farmers and growers.

“We encourage farmers, growers and all relevant stakeholders across the UK to submit their views and help us shape the AHDB of the future.”

Further improvements to the governance and structure of the AHDB are already underway. A reformed AHDB will support the delivery of our ambitions for a sustainable and competitive agriculture sector, and will help farmers identify innovative ways to reduce carbon emissions, improve competitiveness and productivity, and access new markets."

The consultation is aimed at farmers, growers, processors and others in the food supply chain across the UK who pay a statutory levy specifically to the AHDB.

The AHDB, an arms-length body of Defra, was established in 2008 to help farmers improve their performance and drive growth through research, knowledge exchange, improving market access and marketing activities.

The consultation extends to the whole of the United Kingdom. For further details and to respond to the consultation, visit the related GOV.UK page: https://consult.defra.gov.uk/ahdb-relationship-team/ahdb-order

HORTICULTURE INDUSTRY REACTION

Simon Redden from Redford Flowers, who helped organise the ballot to end AHDB Horticulture: "We welcome the consultation and will submit our views and those views of those growers we represent but until we can read and discuss between the petitioners we can’t yet comment other than to say there must be levelling up done across the country in form of grant schemes to help tackle labour shortages and Horticulture must be recognised as providing healthy products and employers of vast amount of employees while they have been lacking the subsidies that Agriculture has been given."

NFU horticulture and potatoes board chair Ali Capper said: “The NFU has always maintained that Defra should respect the results of the ballot for both the AHDB horticulture and potatoes levies and many growers will feel relieved that there is finally some clarity emerging.

“However, the significant delay from Defra in releasing a response to the ballot and this consultation has provided growers with little time to adapt to these new circumstances and I am concerned that important research will be put on hold. It is critical that those sectors that wish to continue to work together and jointly fund research programmes have an appropriate legal mechanism in place and are supported in doing so as soon as possible.

“There are also unanswered questions over how different horticulture sectors could engage with each other on shared objectives, such as innovation and development of new technologies, if they want to do so, and we will be asking Defra for clarity on this.

“Growers have expressed significant disquiet at last week’s issuing of levy invoices by AHDB. These have been issued without consultation, with no notice and growers have not budgeted to cover these costs. Together with the significant inflation that growers are having to bear on labour, energy, haulage, packaging and fertiliser costs, there is concern about how these invoices will be paid."

The post-AHDB levy consultation paper, which is due to go out from Defra to growers in mid-November, could restart the levy scheme less than a year after 488 (61% of levy payers who took part) voted to stop paying.

A BPOA North West meeting in October heard the date and some of the scope of Defra's delayed consulation, which follows January's vote by growers to end the horticulture levy.

Reaction came from BPOA chairman designate Derek Jarman, who urged growers to tell Defra what they want. "They voted to terminate the current arrangement but everyone agrees there's a need for EAMUs. I'm pleased Defra are going to fund next year's {EAMU] work." Jarman says if no-one else would fund them, and a company such as Fargro agrees to pay for EAMUs and benefits from that, then that would be accepted by growers.

He says there were not big sums required and Defra should "look in its pockets - as an unsubsidised department of agriculture we should get help from Government for essential research".

He adds that all R&D funding falls upon the primary producer - "why can't that be shared down the chain with wholesalers and retailers?"

The levy consultation is likely to ask whether growers want to make a voluntary or compulsory payment. Jarman says most people are against complusory payments but he has "no idea" how a voluntary payment would work practically.

Binsted Nurseries' Martin Emmett spoke at the meeting about the Growers Better Levy Group campaign to have a limited levy for R&D in the sector. He said we are waiting for a next stage Defra response. GBLG was formed by APS's Phil Pearson - salads were in favour of keeping the levy and GBLG members believe in the principle of a statutory levy, with Pearson calling for 0.1% of turnover to be paid to AHDB and passed on to an agency, plus an additional voluntary levy. Anti-levy campaigner Simon Redden says if Pearson wants to buy R&D, he should find others who also want it and fund it themselves.

Defra's Ian Smith spoke on how a post-AHDB R&D consultation will work. He said the delayed six-week levy consultation will also include meetings with stakeholders to collect evidence from the industry about future desire for R&D. 

He has been working on the horticulture and potato levies following the ballot in early 2021. Opinions he has heard from levy payers range from them wanting nothing in the future to the levy returning in a different form. Ministers have to approve any changes and they have to be debated in Parliament. Industry opinions from the consultation will be put to ministers who will tweak them over two and a half months before going to Parliament. Changes should be in place for April 2022.

Smith said AHDB would support next year's EAMUs, a gesture which was welcomed by growers.

Emmett wants a voluntary levy for crop protection for obtaining CRD approvals for instance. Automation R&D is another area of potential collaboration. He says Defra will not come to a settlement separately with edibles and ornamentals and wants to "keep us on the bus". A grower governed body would run a levy group, with a smaller fee payable. He said GBLG had not had input into the Government's planned consulation. Emmett said former AHDB chairman Peter Kendall was driven by a desire to "lead" horticulture, when the sector only wanted support. He wants a mechanism where all parts of the industry "dib in" and not just growers.

Growing Media Association's Neil Bragg said all businesses recognise they need some development work, on breeding, variety selection or EAMUs and AHDB's Wayne Brough has been useful to the industry with this. However, he criticised Peter Kendall's tenure at the AHDB for "ruining" its horticulture work. "The danger is that the levy's good work will disappear".

Bragg said new AHDB chairman Nicholas Saphir did not do himself any favours by not meeting AHDB critics. Bragg said levies should not just be on growers, but on all industry businesses. BPOA regional groups need to identify the issues and coordinate action plans on programmes such as UV lighting. This is a time to reassess and be more positive about regionalisation, helped by a national coordinator, he added.

AHDB's Annual Report is out later this year than usual and is not due to be published until 30 November.


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