Draft Agriculture and Horticulture Development Board (Amendment) Order 2023

(Limited Text - Ministerial Extracts only)

Wednesday 19th July 2023 General Committees

[The Minister for Food, Farming and Fisheries (Mark Spencer)]

I beg to move,

That the Committee has considered the draft Agriculture and Horticulture Development Board (Amendment) Order 2023.

It is a pleasure to serve under your chairmanship, Sir Robert. I will start by declaring my farming interests as set out in the Register of Members’ Financial Interests.

The draft statutory instrument delivers a package of modernising financial and operational improvements to the Agriculture and Horticulture Development Board. I will highlight some of the fantastic work that the AHDB does: it invests about £42 million each year in a range of levy-funded services for farmers and others in the agrifood chain, including applied research, knowledge exchange, market intelligence and analysis, marketing and consumer education, and working with the industry and Government to establish new export markets.

The draft instrument modernises the Agriculture and Horticulture Development Board Order 2008 so that it can continue to deliver those important services efficiently and effectively. It will allow more agricultural services to access the AHDB’s services in future. It will deliver flexibility for sectors including poultry, wine and related agrifood chain industries such as supermarkets to work with the AHDB where they wish to. Any activities that the AHDB undertakes through this expanded scope will be funded by those industries in accordance with article 8 of the AHDB order, which enables the AHDB to charge for services. That will not involve a statutory levy.

The draft instrument delivers changes to help the AHDB reduce administration costs and to operate more efficiently. It will put in place a more efficient process for ministerial approval of levy rates, so that in future approval must be sought when changes are being proposed, rather than bureaucratic annual approval by default when nothing is changing. It will also enable the AHDB to deliver a temporary zero-rated levy if there is financial pressure within the sector due to exceptional circumstances such as a disease outbreak or a market crash.

The draft instrument will also deliver important modernising changes to outdated levy deduction provisions. Those provisions enable third-party levy collectors to deduct a percentage of the levy that they collect to cover any admin costs. However, Members will be aware that modern automated financial systems have significantly reduced the admin costs of collecting such a levy, so we want a more flexible provision to be implemented. The instrument leaves the levy deduction rate open to be reviewed and agreed between third-party levy collectors and the AHDB, rather than being set in statute at a specific rate. It can be much more flexible moving forward. This will deliver better value for money for levy payers, and more of the levy income collected will be returned to the AHDB to invest in delivering the services that we spoke about previously.

A further important update to the AHDB order concerns the maximum levy rate allowed for the sheep sector. The levy rate for the sheep sector has been at the maximum allowable rate for more than 10 years—we are going to raise the maximum ceiling for each sheep category by 25% to provide headroom within the AHDB to consult the industry further on the appropriate levy rate to maintain the services that they receive from the AHDB in the future. The new ceiling per head of sheep will be 75p for producers, and 25p for slaughterers and exporters. The Government consultation on that reform showed that key industry organisations such as the National Sheep Association and the National Farmers Union are supportive of raising the sheep levy ceiling. The AHDB will undertake further consultations with the industry on future options for changing those levy rates.

Finally, the draft instrument delivers some smaller changes to modernise the AHDB order so that it is up to date with current practices on invoicing, reflects consolidation of the pig sector, and is in line with Cabinet Office guidance on public appointments of board members.

[Hilary Benn (Leeds Central) (Lab)]

On the amendment of article 12, which deals with who can vote, the measure will replace

“Any person who keeps pigs in England”

with

“Any person who pays the producer levy related to pigs”

I assume that that means that the number of people who will be able to vote is reduced, as there are some people who keep pigs who do not pay the producer levy. Is that correct?

[Mark Spencer]

That is correct, but we are talking about people who have pet pigs in their garden. They will pay a levy if they choose to slaughter their pet pig, but I would think that that is quite unlikely.

In conclusion, these modernising updates to the AHDB regulations will ensure that the AHDB can continue to deliver important services to farmers and others in the agrifood chains efficiently and effectively.

--- Later in debate ---

[Mark Spencer]

I thank the shadow Minister for his comments. I join him in thanking Nick Saphir, as well as Tim Rycroft, who is stepping down as chief exec after two years in the role.

The answer to a lot of the shadow Minister’s questions is transparency; as long as we all know what is happening and can scrutinise what is happening, that will be the answer to a lot of the challenges. Yes, the AHDB will set out governing principles for the new activities. Those principles will be set out in a new AHDB framework document, which will give us the chance to scrutinise them.

I hear the shadow Minister’s valid comments about smaller producers. I declare an interest as a potato farmer who voted not to pay the levy. The motivation behind that, for a lot of smaller producers, was that they did not feel as if they were getting value for money from the levy. I think that that point has been recognised, certainly under Nick Saphir, and the AHDB has learned the lessons of that vote, which is why it is now engaged with levy payers to ensure that it offers good value for money and that levy payers understand what they are getting for their contribution.

I am happy to have a debate about our support for farmers, but I think we have already rehearsed the matter several times at the Dispatch Box. I would be delighted to spend the next hour going over it, but we will probably leave that for another occasion.

I hear the shadow Minister’s comments about ensuring that we link up research sites across the country. We are privileged to have some of the best research organisations anywhere in the world, never mind in Europe. We have to make sure that we join them up so that they are all pulling in the same direction. That may well require co-operation internationally as well as across the UK; as we are all aware, there are massive challenges coming for the world. The National Institute of Agricultural Botany, which is very close to the shadow Minister’s constituency, is a great research institute. Let us make sure that all such organisations are pulling in the same direction and building a great future for us, to keep us all well fed, to protect the environment and to improve biodiversity. That is our shared aim.

Question put and agreed to.