Consultation on AHDB Order 2008 (Changes to AHDB Statutory Instrument)

17 November 2021

Government has opened a consultation on proposals for legislative reforms to the Agriculture and Horticulture Development Board Order 2008 (the AHDB Statutory Instrument).

The consultation will be open until 10^th January 2022.

The proposed changes seek to establish the legislative foundations for a reformed AHDB and sit alongside improvements already underway to the structure and governance of AHDB to deliver a more efficient and focused organisation giving value for money and greater accountability to levy payers in the future.

The consultation proposals take forward the recommendations from the Request for Views and responds to the outcome of the recent ballots in the horticulture and potato sectors.

The four main elements are to:

• End statutory levies for horticulture and potatoes: Respect the outcome of the recent ballots in horticulture and potato sectors in Great Britain by ending the statutory levies in these two sectors from the start of the financial year in 2022.
• Provide a duty to run a five yearly vote on work programmes: Improve accountability to levy payers through a new duty to deliver a vote every five years on sector work programmes setting out how the levy will be spent – this is what we are already embarked on with our Shape the Future vote in Spring 2022 (The separate ability to trigger a yes/no ballot by 5% of levy payers in a sector is proposed to remain in the legislation).
• Give AHDB scope to provide services across all UK Ag sectors: Flexibility in future for the AHDB to provide services (where they are requested by industry) to other non-levy paying agricultural sectors on a commercial or voluntary levy basis (where the UK Government and the Devolved Administrations agree that there are benefits to this).
• Raise the ceiling for English sheep levy: The current levy rate charged for English sheep is at the maximum allowable. Raising this limit will create more flexibility for English sheep sector to request additional AHDB services (such as export market development).

Should you require any more information about how this service is provided, please feel free to contact the team at EAMU@ahdb.org.uk.

9 November 2021

Following the ballot of potato and horticulture levy payers earlier this year (2021), the AHDB Board has been in communication with government ministers and has taken the decision to wind-down statutory levy-funded potato and horticulture operations.

UK Ministers’ have now agreed the potato and horticulture levy rates for this year (see detail below) to cover the costs of winding down the horticulture and potato levy-funded activity.

AHDB expects that this will be the final year for these two statutory levies, and we understand that government will launch an industry consultation later this year (2021) on proposed changes to the legislation that governs AHDB and on future options.

Potato levy rate and wind down costs

• Following the ballot of potato levy payers earlier this year (2021), the AHDB Board has taken the decision to completely wind-down statutory levy-funded potato operations.

• The potato grower and buyer levy rates for 2021 are unchanged at £42.62 per hectare for growers and £0.1858 per tonne for buyers.

• Levy funds collected in 2021, together with sector reserves, will be used to cover the costs of winding-down all levy-payer activity in the potato sector:

  • to see out existing contractual liabilities including research programmes, so the value of levy already invested is not lost (£4 million)

  • to see out existing contractual liabilities for potato storage programmes, so the value of levy already invested is not lost (£0.6 million)

  • to cover the costs of lease commitments and staff redundancies, excluding Sutton Bridge Crop Storage Research facility (£1.7 million)

  • to cover the costs and asset write-downs of closing Sutton Bridge Crop Storage Research facility, including staff redundancies and after site sale proceeds (£1.1 million)

• For AHDB Potatoes it will cost in total around £7.4 million to meet all the liabilities through the planned transition of activities and the wind-down process. AHDB Potato reserves at 31 March 2021 were £1.2 million (subject to audit).  The 2021/22 levy rate is expected to raise £5.6 million. AHDB and Defra Ministers do not want to continue the current levy in 2022/23 just to cover wind-down costs, therefore Defra has agreed, exceptionally, to underwrite up to £0.6 million to cover the potential shortfall.

• The AHDB has now started the decommissioning that will bring about the closure of the Sutton Bridge Crop Storage Research facility in December 2021, leading to the sale of the site, on the open market, with proceeds returned to levy funds.

• For information on the Sutton Bridge Crop Storage Research facility sale, please see the marketing page

• Any excess funds at the end of the wind-down process will be held for a period of up to 6-years to fund any residual potato liabilities which may arise. After this period the utilisation of any funds remaining would be discussed with the industry and government.

• AHDB will remain legally required to pursue all overdue levy payments.

Horticulture levy rate and wind down costs

• Following the ballot of horticulture levy payers earlier this year (2021), the AHDB Board has taken the decision to completely wind-down our statutory levy-funded horticulture operations.

• The levy for 2021 has been calculated on a reduced levy rate of 0.27% on your adjusted sales figure (down from 0.45% in 2020). 

• The levy funds collected in this year (2021), together with sector reserves, will be used to cover the costs of winding-down all levy-payer activity in the horticulture sector:

  • to see out existing contractual liabilities including research programmes, so the value of levy already invested is not lost (£7.4 million)

  • to cover the costs of lease commitments and staff redundancies(£1.4 million)

  • at Defra’s request to fund a transitional EAMU/emergency authorisation service in 2022/23, so benefits are not lost for the industry and to enable time for the service to potentially be transferred to a third party (£1.8 million). Further details on the EAMU and Emergency Use service.

• For AHDB Horticulture it will cost in total around £10.6 million to meet all the liabilities through the planned transition of activities and the wind-down process.

• AHDB Horticulture reserves at 31 March 2021 were £6.05 million (subject to audit). The reduced 2021/22 levy rate is expected to raise £4.55 million.

• Any excess funds at the end of the wind-down process, will be held for a period of up to 6-years to fund any residual horticulture liabilities which may arise. After this period the utilisation of any funds remaining would be discussed with the industry and government.

• AHDB will remain legally required to pursue all overdue levy payments.