APPENDIX 1: EXPLANATORY INFORMATION
Draft Agriculture and Horticulture Development
Board Order 2007
Issue
1. Further information requested on background
and reasoning to the continued inclusion of the Horticultural
Development Council (HDC) within the levy board restructuring
and reform programme, in particular with reference to the results
of recent public consultations.
Public Consultations
2. During the consultation on the recommendations
of the Radcliffe Review, the HDC successfully encouraged its levy
payers and trade associations to respond, resulting in a large
percentage of the responses coming from this sector. The majority
of these respondents expressed the view that there was little
to be gained from the inclusion of HDC in the proposed restructuring.
The reasons for their opposition were given as : -
- loss of sector focus
- limited overlap/synergy with agricultural sectors
- already high efficiency/effectiveness of the
HDC
- fear that levies would be used to cross-subsidise
other sectors
- risks associated with change
- limited potential cost benefits
- loss of governance/accountability
3. Many respondents did acknowledge the need
to address some weaknesses in the current levy board structures
mentioned in the Review and all sectors supported the continuation
of the statutory levy and a 'Fresh Start' examination of the levy
board activities and levy rates.
4. Other stakeholders such as the National Farmers
Union and the Horticultural Trades Association were supportive
of a change to the current structures.
5. A further public consultation was held from
March to June 2007, on what is now entitled the draft Agriculture
and Horticulture Development Order, which aims to implement the
new structure. The majority of respondents to this consultation
acknowledged that there was a need to modernise and simplify levy
arrangements, reducing burdens where possible. However it is true
to say that many of the respondents from the horticultural sector
continued to have deep reservations about the inclusion of the
HDC in the reform process.
Rationale behind continuing inclusion of the horticulture
sector/HDC within the restructuring
6. Whilst some within horticulture may consider
their sector to be sufficiently different to agriculture to merit
separate levy board arrangements, we believe there are many areas
of common interest where the successor to the HDC, the horticulture
sector company, would benefit from being more closely linked to
the other agricultural sectors.
7. The responses to the public consultation on
the Review also made clear that a number of growers contributed
to at least one other statutory body such as the Home-Grown Cereals
Authority or the British Potato Council. The restructuring will
aim to ensure that service provision is delivered to levy payers
in all sectors more efficiently and effectively.
8. In setting out the justification for the continuance
of the statutory levy in all areas, the Review noted key drivers
of change to which both the agriculture and horticulture sectors
would need to respond. In particular:
- state aid arrangements
- key EU environmental legislation such as water,
waste
- World Trade Organisation and trade liberalisation
- Sustainability and climate change
- public sector efficiency
- reducing administrative burdens.
9. All these drivers affect the horticultural
sector in some way. For example, both horticulture and potato
growers face a number of similar issues over water use and water
quality or off-label pesticide use.
10. The Radcliffe Review found that that although
the HDC is highly regarded by most, as with all levy boards there
is room for improvement. In particular it was noted that HDC would
need to take a more strategic approach to the issues facing the
sector and would benefit from the reform which would deliver further
efficiencies.
Conclusion
11. The HDC is a highly valued and efficient
organisation and we would want to ensure that the successor arrangements
continue to provide the same high level of service and responsiveness
to levy payers. However the reform aims to provide better value
for money and greater accountability to farmers and growers who
pay the statutory levy, regardless of which sector they are from.
12. Other benefits of the reforms include:
- improved governance and transparency e.g. decisions
on levy expenditure taken close to levy payers;
- improved performance evaluation and opportunity
for shared learning between sectors;
- Fresh start exercise ensuring appropriate activities
undertaken;
- Improved coordination of scientific and other
research and development;
- Increased flexibility to adapt to changes in
sectors/industry;
- Strategic coherence - better "joining up"
across sectors;
- Cost savings from increased efficiency and sharing
of services.
Department for Environment, Food and Rural Affairs
November 2007
| 
