DRAFT AGRICULTURE AND HORTICULTURE DEVELOPMENT BOARD (AMENDMENT) ORDER 2022
(Limited Text - Ministerial Extracts only)
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The Parliamentary Under-Secretary of State for Environment, Food and Rural Affairs (Rebecca Pow)
I beg to move,
That the Committee has considered the draft Agriculture and Horticulture Development Board (Amendment) Order 2022.
As ever, it is a pleasure to have you in the Chair, Sir Gary.
This statutory instrument, a draft of which was laid before the House on 29 March, will deliver a reformed and more accountable Agriculture and Horticulture Development Board, which will play an important role supporting farmers through a time of significant transition. While the instrument marks an end of the AHDB’s levy work in the horticulture and potato sectors, it also marks an important new beginning for how the AHDB engages with and delivers for other sectors, including cereals, oilseeds, beef, sheep, pork and dairy.
The draft instrument respects the outcome of the recent ballot of levy payers in the horticulture and potato sectors, in which more than 60% voted to end the AHDB statutory levy. It is clear from the ballot and industry feedback that the statutory levy mechanism is not meeting the diverse needs of horticulture and potato businesses, and a different approach is needed going forward.
It is important to highlight, however, that although the overall result of the horticulture ballot supported an end to the statutory levy, there are diverse views, with some subsectors such as soft fruit, tree fruit and mushrooms voting to keep a levy. I recognise the concerns of some growers about losing investment in important research and crop-protection activities that the AHDB levy traditionally funded. Therefore, while the draft instrument respects the ballot by repealing the statutory levy provisions, it also ensures that the horticulture and potato sectors remain in scope of the Agriculture and Horticulture Development Board Order 2008.
This means that any parts of the industry that want to continue to work with and fund the AHDB are able to do so on a voluntary levy or commercial basis in future. That enables the AHDB to continue to deliver legacy research and plant-protection services to those sectors during a transition period. I assure hon. Members that the Government continue to engage proactively with the horticulture industry to develop alternative industry-led funding models for research and development activities.
The Minister for Farming, Fisheries and Food, my hon. Friend the Member for Banbury (Victoria Prentis), who should have been moving consideration of the draft SI but was unable to do so, recently chaired a roundtable with industry to discuss that issue. She was pleased to hear that the industry is coming together to formulate new funding models, such as grower-led syndicate funding for priority crop research and development activities, and the potential for a voluntary levy to fund activities that require a more co-ordinated and long-term approach, such as for crop protection, pesticide application or horizon scanning for sustainable alternatives.
The draft instrument also marks the beginning of a new direction for the AHDB: an AHDB that is more accountable to levy payers in other sectors, including beef, sheep, pork, dairy, cereals and oilseeds. It also delivers a new duty on the AHDB, giving levy payers a regular vote on sector priorities. That is something that people particularly requested—they wanted a more regular say, and that will happen every five years. In future, therefore, levy payers will have more influence over AHDB sector programmes, and over how much levy will be raised and what it will be spent on. The whole thing will be more focused on what those paying the levy say they want.
The AHDB has been working hard to deliver that already through its “Shape the Future” campaign. That is where levy payers vote—as they have just voted—on the priorities that they want the AHDB to deliver over the coming months and years. That is a momentous step forward for the organisation, marking a turning point by putting levy payers right at the heart of everything it does.
I draw the Committee’s attention to a technical drafting point. As a consequence of removing the horticulture levy provisions, the draft instrument will broaden the definition of the horticulture industry in the AHDB order. The definition will now include the growing of a wider range of horticultural products by way of business. That will deliver more flexibility in future as it will enable more businesses in the horticulture sector to work with the AHDB on a voluntary levy or commercial basis if they wish to do so. To support such flexibility, the draft instrument also includes provisions to clarify that the AHDB can charge to cover the cost of services that it may deliver in future to any agriculture or horticulture business that is in scope of the AHDB order.
Those legislative changes sit alongside significant governance and cultural changes that the AHDB has already put in place to deliver a more inclusive democratic organisation that is in a stronger position to meet the needs of farmers. We all know how important that is, particularly right now, and the changes should set them up well for the future.
Rebecca Pow
I thank those who have made an input to this debate. I very much welcome the support of both shadow Ministers—from Scotland and from the Labour Bench—and I agree that it is absolutely right that we respect this democratic vote. The Government said that we would, and we have done so. It is the right way to proceed, as is listening to the views of our farmers. That is critical, and one good thing about this tweak is that the farmers themselves will be much more involved in the research and the requirements they want from the levy, which, after all, they are paying.
I also agree that it is important that we equip our farmers—particularly in such times as we are facing—with the very best research, data and scientific advice. I believe that the AHDB has in the past done a great deal of that, but it will now be even more tailored towards our farmers so that they will get what they need and want to keep them in the globally leading position that they already hold. However, we must work on going forwards.
I recognise that there are concerns regarding the loss of £14 million of the annual levy funding for horticulture research and the need to retain skills and research capabilities in these sectors. We must recognise, however, that the one-size-fits-all approach—that is, the previous mechanism—is not working for the diverse needs of these sectors. That is why it is clear that we must listen, and their view in the ballot was to end the statutory levy contribution.
As I have previously highlighted, new approaches to funding horticultural research and crop protections are being worked on, including voluntary levies, subscription or membership models, and commercial agreements with the AHDB or other suitable organisations capable of co-ordinating and delivering applied research services for the industry. Obviously, many bodies do such work, such as the amazing UK Centre for Ecology and Hydrology, which I visited just this week. The work it is doing for a wide range of different industries in the farming and environment space is phenomenal, and East Malling and all the other research centres, such as the James Hutton Institute in Scotland, will all have their place.
The shadow Minister, the hon. Member for Cambridge (Daniel Zeichner), raised the issue of whether pooling the money would help the bigger industries, such as the beef and sheep sectors, more. I believe that the new approaches that are being worked on for horticulture and the potato industry will get around that, with smaller groups of individuals, such as those in the horticulture sector, able to get what they need out of the research. Voluntary levies have some advantages over statutory levies, which are classified as public money and are therefore bound by tighter rules and restrictions, as was outlined in the other place yesterday. Funding from voluntary levies can be used in a much more flexible way—for instance, to lever in match funding from other investment. Discussions with industry on those options are ongoing, with the aim of agreeing new industry-led funding models over the coming months.
I recognise the increasing importance of supporting our horticulture sector, particularly as we face the challenges of rising input costs. We are all looking at the opportunities and barriers that the horticulture sector faces in supporting sustainable growth and increasing productivity, especially given that sustainability, food security and so forth play such an important role. That includes looking at innovative ways of doing so, such as vertical farming. I have seen some of that myself; what can potentially be achieved is phenomenal, and we are looking at powering some of that with solar panels. The world seems to be really accelerating, with greater automation and other technologies that can help maximise crop growth and increase productivity, but we are also working hard to tackle the labour supply challenges that the sector faces.
I expected the shadow Minister to mention the seasonal worker visa, but he did not do so. That visa will be extended through to 2024, allowing overseas workers to come to the UK for up to six months to harvest both edible and ornamental crops. Some 30,000 visas will be available this year to cover this harvest period, which will be kept under review.
The Chair
I am sure she will do that, but we will now go back to the order, if that is okay.
Rebecca Pow
Thank you, Sir Gary, for keeping us absolutely on track. Of course, we are dealing with horticulture, and I hope the shadow Minister is pleased that there will be 30,000 visas to help that sector. I am absolutely sure that that case is being made for the whole horticultural industry.
I understand the frustrations expressed about the fact that reforming the AHDB has taken some time and has potentially come too late for people in the horticulture and potato sectors who have voted with their feet. There were delays, but those were due to the inevitable reprioritisation of work because of covid-19. Before the ballots were triggered, the AHDB had already started that journey of reform, including engaging with the horticulture and potato sectors on options for modernising the levy mechanism. Views across the sector on the statutory levy have, however, been very polarised, and agreement on a new statutory structure was not forthcoming before the ballot was called.
I will answer a couple of further questions. A point was made about the ongoing blight service and the aphid monitoring service, and I note that Scotland already has an arrangement to keep those going. We are in discussion with the Scottish Government and key bodies, such as the James Hutton Institute, on the impacts of the potato levy ending and on how Scottish potato businesses want to find key services. We will provide more detail when those discussions have concluded. I hope that answers the shadow Minister’s questions. I will be happy to write to him if there are any further details, but I think that covers it for now.
The shadow Minister also asked whether the draft order covers the devolveds as well. It has been made quite clear that it does, but there are varying degrees of involvement, depending on the sectors.
I would like to give assurances that the AHDB is fully committed to putting levy payers at the heart of its operations, and a significant change programme has now been implemented. A new skills-based board is in place, and at least 50% of its members are current or recent levy payers. Levy payers can now vote on the membership of the AHDB sector councils, making them more representative and accountable—that was raised and has now been dealt with. Additionally, the results of the AHDB’s Shape the Future campaign have just been published and can be assessed on the AHDB website. I think they came out yesterday, and they give important levy payer feedback. It shows that farmers value the work that the AHDB does to open new export markets, to educate consumers, to promote UK produce, to provide reliable independent data and market intelligence, and to provide products and services that help farmers to be more efficient, more profitable and sustainable. All the detail of what came out of the recent assessment is on the website.
This instrument provides much-needed certainty on the end of the statutory levy in horticulture and potatoes, enabling the industry to move on and develop new funding models that are better suited to their needs. Importantly, it also underpins the beginning of a reformed and more accountable AHDB to other levy-paying sectors, delivering value for money and supporting our precious farmers, whether they are in Wales, England, Scotland or Northern Ireland. We are making the whole system more accountable and delivering what our farmers really want and need. On that note, I commend this instrument to the Committee.
Question put and agreed to.