Statutory levies retained in radical restructuring of levy boards

Radical restructuring of the five levy boards will take place by April 2008 and provide better value and greater accountability for farmers and growers who pay the statutory levy, Defra announced today.

The five levy boards, consisting of the British Potato Council, the Meat and Livestock Commission, the Milk Development Council, the Horticultural Development Council and the Home Grown Cereals Authority, will be replaced by one statutory levy board, with sector specific companies, in April 2008.

Minister for Sustainable Farming and Food, Jeff Rooker, said:

“We have retained the levy because there was overwhelming support for this from farmers and growers during the public consultation. But changes are still needed to the current structures to help the industry meet future business challenges. “

“We will appoint a new Chair and board to lead the process of reform, including a review of the needs of industry and the rates of levy. ”

“The industry has altered radically since the first levy board was established over 40 years ago and the new structure should bring substantial benefits for farmers and growers, including better value for money through improvements in the efficiency and effectiveness of service delivery.”

The announcement follows a twelve week consultation on the recommendations of the independent Radcliffe Review into the levy boards and discussions with a number of key stakeholders. Separate consultations were undertaken in Scotland, Wales and Northern Ireland.

The statutory levy has been retained, in line with Rosemary Radcliffe's recommendation, on the basis of market failure in the sectors concerned. The vast majority of respondents (92%), including all major stakeholders, to the public consultation supported retention of the statutory levies although a number did want to see improved value for money.

There will be six sector companies: horticulture; cereals & oilseeds; potatoes; milk; beef & lamb; and pigs. The new levy board will have the Chairs of the six sector companies on the board, plus four independents. Levy payers will be in the majority on the boards of the subsidiary companies.

Ministers in the Welsh Assembly Government and the Scottish Executive are making separate announcements today about the arrangements for meat bodies, Hybu Cig Cymru and Quality Meat Scotland.

For more information about the Levy Board Review see the Defra website: www.defra.gov.uk

Or contact Defra Press Office: 020 7238 6092.

NOTES FOR EDITORS

1. In March 2005 Rosemary Radcliffe was appointed by UK and Devolved Administration Ministers to undertake an independent review of the five bodies. She reported her findings and recommendations to Ministers at the end of October 2005. She identified four areas where there was a need for changes or improvements: governance and accountability; activities and priorities; arrangements with regard to the levy; and efficiency and effectiveness in service delivery. She concluded there was still a case for statutory levies to address issues of market failure in the sectors in question, but she made recommendations for a new structure, replacing the current levy boards with one overarching levy board and a number of subsidiary companies.

2. In summary, she concluded there is still a case for statutory levies to address issues of market failure in the sectors in question, and she made recommendations for a new structure, replacing the current levy boards with one levy board and a number of subsidiary companies.

3. A full public consultation on Rosemary Radcliffe's report, the “Review of the Agricultural and Horticultural Levy Bodies”, began on 11 November 2005 and finished on 3 February 2006. Levy payers and stakeholders were asked for their views on a number of issues covered by the Report including continuation of the statutory levy, the future structure of the levy bodies, the type of activities that should be undertaken, accountability to levy payers, and matters surrounding the collection of levy. There were separate consultation exercises in Scotland, Wales and Northern Ireland.

4. Defra received 228 responses to the public consultation from a wide variety of stakeholders including all the levy boards, the main trade associations, the NFU and levy payers. Responses to the public consultation are available for viewing in the Defra library and a summary of all the responses has been placed on the Defra website. In addition to seeking views in the public consultation on the continuation of the statutory levies, a Fresh Start review and a different structure, views were also sought a number of other issues raised in the Radcliffe Report.

See link: www.defra.gov.uk/farm/schemes/levy-bodies/index.htm

5. one of the key proposals of the Report and this proposal has met with broad agreement from levy payers and their representatives. A common framework of activities should be developed by the Levy Board drawing on the work undertaken by the sectors as part of the Fresh Start exercise.

6.Under the new arrangements, levy payers will have the right, in principle, to trigger a vote on abolition of a levy or sector company; and that potential levy payers would have the right to vote on any proposed new levy.

7. Processor and dealer levies will continued in those sectors – potatoes, cereals and meat – where they currently apply but this issue will be reviewed in 5 years time. The general and promotional meat levies will be combined.

8. The consultation on the Radcliffe Review of the Levy Boards was launched on 11 November 2005 and finished on 3 February 2006. See link: www.defra.gov.uk/farm/schemes/levy-bodies/index.htm

9. Advertisements for the new levy board Chairperson post will be advertised this summer with the intention of having someone take up post by the end of this year to oversee the restructuring process.

End

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