LEVY LATEST

WILL IT BE HEADS OR TAILS ON THE TOSS FOR FUTURE LEVIES?

With no decisions made by government following the AHDB ballot, what might be next for horticulture levies?

Words: Hayley Campbell-Gibbons

The AHDB Horticulture ballot result of February 2021 was clear, with 61% of growers voting to discontinue the levy. Yet, when viewed by sector, or amount of levy paid, the picture was less clear cut. Voting by crop or value wasn’t what the AHDB ballot was about, but it has become the focus of industry discussions about whether there could, or should, be a horticulture levy mechanism of some form for the industry in future.

THE CONSULTATION

Defra launched its consultation in November 2021 asking for views on proposed changes to the statutory levy, which would reform AHDB and respond to the outcome of the horticulture and potato sector ballots. Key questions for growers and their representative bodies include:

‘Should the AHDB Order be amended to remove the statutory levy in the horticulture sector in Great Britain?’ and ‘Do you want the AHDB’s application service for emergency authorisations (EA) and extension of authorisation for minor use of pesticides (EAMU) for the horticulture sector in Great Britain to continue?’.

The consultation closed on 10 January 2022 and responses are currently being reviewed. Defra is likely to encounter a broad spectrum of views, with growers from every sector coming out on both sides of the levy fence.

DIVIDED OPINIONS NFU view

The NFU accepts the ending of the current levy but wants to see a retained mechanism so that individual crop sectors within the broad and diverse category of ‘horticulture’ can resurrect a mandate and create a levy in the future.

Responding to the Defra proposals, NFU Horticulture and Potatoes Board chair Ali Capper comments: “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 fi nally some clarity emerging.

“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.”

She adds: “There are also unanswered questions over how diff erent 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.”

The British Protected Ornamentals Association (BPOA)

The BPOA has lost confi dence in AHDB, it says, due to funding non-relevant projects, poor value for money and lack

of transparency. It concludes that AHDB is not a suitable organisation to run future research. On future options and alternative models, the BPOA has been involved in discussions at government and grower level, and has published a set of principles on future levy proposals, including: • Some growers would support a statutory levy if it was more accountable, with modern governance • A voluntary or subscription research model has the benefits of attracting match funding and tax allowances • The EAMU and EA service is vital to the industry and a statutory scheme, based on a ‘crop protection levy’, could be supported if all of arboriculture and horticulture contributed.

British Growers

British Growers held a meeting of its crop association chairs in November 2021 where the consensus was that ‘doing nothing’ is not the right solution. One area where significant agreement was reached was on the question of crop protection and emergency use approvals.

Chief executive Jack Ward says: “If the industry wants this work to continue, then the industry will need to fund it.

“The issue for consideration is whether there is merit in asking Defra to retain its compulsory levy raising powers to allow the collection of funds from all growers to fund the cost of future crop protection work.

“On the question of the wider R&D work, the appetite to continue to invest in projects varies from crop to crop.”

The Growers’ Better Levy Group (GBLG)

The GBLG, a voluntary coalition of 36 growers in the horticulture and potato sectors, believes that a collaborative approach to R&D, knowledge exchange and connecting researchers to growers is still needed.

The group has set out its vision for a future architecture, which includes the continuation of a small statutory levy to fund critical work and a larger voluntary levy for programmes of work that growers should vote for, by sector, on a regular basis. Crucially, the group believes that the fund should not be raised or run by AHDB.

Following the announcement of the Defra consultation on the future of the AHDB, the group’s chair, Phil Pearson, director at APS Group, says: “Our group believes that a new body should undertake critical work, ideally one that achieves collaboration across all horticultural crops so that we can achieve economies of scale.

“We do not believe that AHDB should lead this work because the organisation needs radical reform and will need new and meaningful grower governance in place that provides value for money and full cost transparency.

“For fairness, each sector of horticulture must be allowed to vote on proposals for the level of levy raised and how their levy will be spent.”

The group also advises that the legislation should be amended to further divide the field vegetables’ sector; previously the largest of all the sub-sectors covered by the legislation.

AHDB HORTICULTURE WIND-DOWN ACTIVITY AND COSTS

The AHDB Horticulture sector board has a revised remit to provide oversight of the wind-down process. Peter Judge, a soft fruit grower from Herefordshire, is the interim chair and attends the main AHDB board as an observer. This arrangement will be reviewed in March 2022, when the current levy period ends.

There are currently 51 horticulture projects running, reducing to 28 in 2022/23, 11 in 2023/24 and 3 in 2024/25 as research contracts come to an end. All the project findings will be made available to growers online.

For AHDB Horticulture, the cost of the wind-down is c.£10.6 million, which is broken down as:

• £7.4 million on committed research contractual liabilities • £1.4 million to cover the costs of lease commitments and staff redundancies • £1.8 million, at Defra’s request, to fund a transitional EAMU/ emergency authorisation service in 2022/23 to enable time for the service to potentially be transferred to a third party.

AHDB Horticulture reserves at 31 March 2021 were £6.05 million (subject to audit). The reduced 2021/22 levy rate of 0.27% of adjusted sales figures (down from 0.45%) is expected to raise £4.55 million.