Flexible Defra stance offers resolution hope in levy saga

A resolution to the long-running saga of how the Horticultural Development Company (HDC) levy should be calculated has moved a step closer after it was suggested that the board could use different criteria for different crop groups.

At an NFU horticulture meeting in East Malling last week, HDC chairman Neil Bragg said since a consultation on the criteria that should be used for collecting the levy had closed in late February, Defra's stance on the levy payment system had become more flexible.

"It's quite amazing how its position has changed," he said. "We were told that statutory instruments cannot be changed, but a lot do go back for revision. They are not written in tablets of stone."

Problems started when the levy boards merged in 2007 and top fruit growers were told that their levy calculation would have to be brought into line with other growers. Until then the top fruit levy was based on orchard area while most other growers, apart from mushroom businesses, had their levy calculated on turnover above a £60,000 threshold.

Fruit growers reacted with fury. The change would mean around 50 per cent of apple and pear growers would no longer pay the levy while the rest would pay as much as three times more than before.

Their reaction prompted the HDC tree fruit panel to commission Cranfield University's Professor Sean Rickard to review the system. He proposed reducing the payment turnover threshold from £60,000 to £20,000, scrapping the deduction of business costs from the gross levy and reducing the levy rate from 0.5 to 0.35 per cent to compensate for this reduction.

Because it thought any such changes would have to be applied to all sectors to ensure equality of treatment, the HDC opened an industry-wide consultation.

Presenting the findings at the meeting, HDC technical manager Andrew Tinsley said although growers of hardy nursery stock and protected crops were against reducing the levy threshold to £20,000, neither was there any pan-industry desire for the change.

Likewise, there was no strong industry desire for removing the business expense deduction - also strongly opposed by hardy nursery stock and protected crop growers. In stark contrast, 70 to 80 per cent of top fruit growers said they were in favour of all three proposals.

Bragg told the meeting that the new flexibility from Defra meant the tree fruit sector might be able to operate the levy collection arrangement proposed by Rickard or even return to the area payment system while that used by other sectors could remain unchanged.

"If we (the tree fruit sector) want to take this forward as a group we need to present a proposal to the (new) minister about what we want to do and why," said Bragg, "and we need to be fully prepared to do this by June at the latest."

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