§ 8.24 p.m.
§ The Minister of State, Ministry of Agriculture, Fisheries and Food (Baroness Hayman)rose to move, That the draft order laid before the House on 18th May be approved [20th Report from the Joint Committee].
The noble Baroness said: My Lords, the Horticultural Development Council was established by the Horticultural Development Council Order 1986. It is an executive non-departmental public body funded by a statutory levy on growers of horticultural produce. The main function of the council is to commission research and development on behalf of the horticulture industry, excluding apples, pears and hops.
The council raises around £3.6 million per year from the levy. Expenditure on research and development is proportional to the amount of levy raised from growers in each crop sector. Selection of research products gives due consideration to environmental benefits as well as to the needs of the industry, being directed at crop protection; reduction of input costs and chemical usage; increased efficiency and yield; and improved quality.
The HDC was subject to statutory review in 1999 when agriculture Ministers agreed that the HDC should continue for another five years. During the consultation process Ministers agreed that the levy on small growers was a burden and uneconomic for the council to collect. That has led to the amendment to the Horticultural Development Council Order which is before us today.
The amending order makes two changes to the statutory levy. There are two levies: one for mushroom growers with which I shall deal later; and another for growers of other horticultural produce. That latter levy is based on a percentage of the net sales of horticultural crops and is set at 0.5 per cent. Growers with an annual net turnover of horticultural produce below £25,000 are exempted from the levy. The figure of £25,000 was set in the original 1986 legislation. Under the 1999 statutory review it was agreed that the minimum threshold should be raised to £50,000 with effect from the levy year commencing 1st October 2000. The revised threshold would reduce levy income by around £125,000 per annum. It would have minimal effect on the research and development programme and lead to a switch of saved administrative costs to that programme. Around 660 348 businesses would be released from the obligation to pay the levy at an average per business of around £190 a year.
The second change in the amendment order covers the maximum rate of levy that could be paid by mushroom growers. The mushroom levy is assessed on spawn purchased for use in compost. The order provides for a maximum levy of 7p per litre of spawn purchased which is currently applied. The amendment increases the maximum rate for mushroom growers to 15p per litre of spawn. That increase will provide the HDC with the flexibility to propose an increase to the mushroom levy if it becomes necessary to raise additional funds to meet additional research requirements. All available funds collected from the mushroom levy are at present fully committed and there are serious new disease problems facing the industry. The mushroom industry has been consulted and is content, although it does not want to see an increase within the new ceiling in the near future. However, increases are allowed only following industry consultation and with the collective approval of agriculture Ministers. On that basis, I commend the order to the House.
Moved, That the draft order laid before the House on 18th May be approved [20th Report from the Joint Committee].—(Baroness Hayman.)
On Question, Motion agreed to.