Apple and Pear Research Council (Dissolution) Order 2003

HL Deb 20 March 2003 vol 646 cc448-51

7.30 p.m.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty) rose to move, That the draft order laid before the House on 25th February be approved [12th Report from the Joint Committee].

The noble Lord said: My Lords, in moving the first Motion standing in my name on the Order Paper, I shall speak also to the second Motion.

The orders seek to transfer the work of the Apple and Pear Research Council to the Horticultural Development Council by dissolving the Apple and Pear Research Council and extending the HDC's remit to include apples and pears. Both councils are executive non-departmental public bodies funded by a statutory levy on growers and with a remit to commission research and development.

The Horticultural Development Council raises about £3.6 million from the levy, of which about 11 per cent is spent on administrative expenses. The Apple and Pear Research Council is a much smaller organisation. Its levy has been declining with a regrettably contracting apple and pear industry. It raised just under £261,000 in the year ending 31st March 2002 when its administrative expenses were running in excess of 33 per cent of income.

A statutory review of the APRC took place last year and included an independent economic evaluation. The report of the evaluation concluded that there continues to be a requirement for a levy-funded organisation carrying out near-market R&D in support of the apple and pear industry and recommended that the functions of the APRC and HDC should be merged. The continuation of a separate development council solely for the apple and pear industry was seen as unsustainable in the face of declining levy income and the proportion of the council's income that was being devoted to running costs. The recommendations of the economic evaluation were subject to consultation with the industry, which was supportive of the proposed merger of the two councils.

The Horticultural Development Council (Amendment) Order 2003 will make a number of changes. It will allow the HDC to raise a levy from growers of apples and pears; add an additional member to the council to represent the interests of growers of apples and pears; extend the council's remit to allow for market research and promotional activities, thus implementing recommendation 28 of the report of the policy commission on the future of food and farming, the Curry commission; and it will clarify the council's health and safety remit.

Although the amendment order increases the maximum permissible rate of levy for apple and pear growers, which currently stands at 50p above the levy rate of £24.50 per hectare, this does not represent an increase to the current rate but allows scope for future increases.

The Apple and Pear Research Council (Dissolution) Order 2003 will wind up the council and transfer its assets and liabilities to the Secretary of State. Once those liabilities have been dealt with, the remaining assets will be transferred to the HDC to fund apple and pear research.

The merger of the two councils can only be of benefit to payers of the apple and pear levy. I am pleased that the industry—and, indeed, the horticultural industry generally—has given its approval to a move that will make it stronger in the future. I commend the order to the House. I beg to move.

Moved, That the draft order laid before the House on 25th February be approved [12th Report from the Joint Committee].—(Lord Whitty.)

Baroness Byford

My Lords, I thank the Minister for that clear explanation of the two orders. We on these Benches support the move described by the Minister.

It is extremely important that the research and development functions of the HDC and the Apple and Pear Research Council are merged. That will add strength to both bodies, particularly to the smaller body, and to the apple and pear industry. It is important that the functions of quality research into crop protection, reduction of input costs, increasing yields and efficiency, improving the quality of produce and making better use of post-harvesting technology are included. We all want to see the industry thrive.

The amalgamation of the two councils will bring economies of scale, which we welcome. However, we are concerned about the future and the long-term financial commitment of the Government to research. The HDC will extend its remit to cover market research and promotional activities at its centre at East Mailing in the heart of Kent. As the Minister pointed out, this will enhance the recommendation of the Curry commission.

In another place, my honourable friend John Hayes raised the wider issue of long-term horticultural research and resources. The Minister clarified the issue in his response but I should like to put on record that, although we are dealing today with the apple and pear industry, we are still anxious that research into horticulture generally is encouraged and supported by the Government. We welcome the two orders.

Baroness Miller of Chilthorne Domer

My Lords, we on these Benches can see the necessity now for this merger. The research work commissioned by DEFRA into the future of the two bodies was carried out, I believe, in 2001. I hope that that will be seen in future as the low point for British produce. It is already on the upturn: farmers' markets have taken off well since then. The Curry commission pointed out the importance of marketing our produce in a different way. Supermarkets are now at least seized of the issue. When one looks at their shelves, one sees that they are not doing a great deal about it at present, but their literature indicates that they understand it.

Perhaps the Minister will clarify the following points. Some eight recommendations came out of the research at the University of Reading. I shall highlight only one, but I ask that all eight should be taken on board. I refer to the recommendation that there should be a five-year research and technology transfer strategy for tree fruit. I echo the words from the Conservative Benches regarding the importance of research and of the Government providing sufficient support. I ask for that recommendation in particular to be taken on board.

The Earl of Courtown

My Lords, I thank the Minister for bringing these orders before the House. I agree with everything that my noble friend said. There is great concern throughout agriculture about the present state of the industry. The apple and pear industry is no exception. I only hope that this change will help to halt the fact that the industry is shrinking, and that it will help the industry to increase part of its output.

Lord Whitty

My Lords, I am grateful for the support of noble Lords who have spoken. The amount of research funded by the HDC, now to include the Apple and Pear Research Council, is only part of the total support for research into horticulture. A significant part of the Government's expenditure on horticulture, which is itself the largest single element in agricultural research—10 per cent of the horticultural research directly funded by government—relates to apples and pears. The figure last year was £1.1 million. So the apples and pears sector is already receiving a significant proportion of the horticultural research funding.

That recognises the need—indicated by the noble Earl, Lord Courtown, and the noble Baroness, Lady Miller—for an upgrading of the performance of the apples and pears sector. It has been going through bad times in terms of its ability to compete with imports, and in some of the downstream sectors as well. So we are concerned to ensure that the apples and pears sector has a prominent and important research element.

So far as concerns general expenditure on horticulture, the noble Baroness will be aware that an exercise is taking place on the future of HRI, which was the recipient of a very substantial proportion of government research. We hope for a constructive outcome from that. A part of the research will deal with the East Mailing site, which is adjacent to the headquarters of the research councils, but some will deal with the need to bring the totality of horticultural research closer to the market and to enable all sectors of horticulture to have an adequate research base. The Government are committed to that. The total research budget for DEFRA, as for other government departments, has been protected and horticulture will continue to be a major element. I commend the order to the House.

On Question, Motion agreed to.