Rural Affairs, Islands and Natural Environment Committee

Meeting date: Wednesday, April 20, 2022

Official Report 580KB pdf

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Subordinate Legislation

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Agriculture and Horticulture Development Board (Amendment) Order 2022 [Draft]

Our third item of business is consideration of a draft order that is subject to the affirmative procedure. I refer members to paper 2 in their paper pack. It is worth flagging up that we are considering a UK statutory instrument that has been laid in all UK legislatures—I always get tongue-tied on that word. It cannot be laid in the UK Parliament until it has been approved by the devolved legislatures.

I welcome Màiri McAllan, the Minister for Environment and Land Reform, and her officials, who are Neil MacLeod, principal legal officer, and Caspian Richards, head of the policy and pesticide survey unit at science and advice for Scottish agriculture. I invite the minister to make an opening statement.

Thank you, convener, and thank you all for the opportunity to give evidence on the draft order.

By way of background, the Agriculture and Horticulture Development Board—AHDB—is a statutory levy board that is funded by farmers, growers and others in the supply chain. It provides services and advice to support and promote our world-class food and farming industry. The AHDB comprises six statutory levy-paying sectors that are included in the scope of the order, which are: the cereal and oilseed industries in the United Kingdom; the milk, horticulture and potato industries in Great Britain; and the pig, beef and sheep industries in England.

As the convener said, the order is a UK-wide instrument, to be made in exercise of powers conferred by the Natural Environment and Rural Communities Act 2006 on the secretary of state, acting with the approval of the Scottish ministers. The act also provides that the Scottish ministers may not give that approval without the approval of the Scottish Parliament, which is why the order is before the committee today.

The purpose of the order is to amend the principal Agriculture and Horticulture Development Board Order 2008, which established the AHDB and is the source of its functions, to remove the statutory levies in the horticulture and potato sectors in Great Britain. That is being done because, in January and February 2021, levy payers in the horticulture and potato sectors triggered democratic ballots on whether they wanted the statutory levy to continue in their sectors. In the horticulture ballot, 61 per cent voted against the levy continuing, from a 69 per cent turnout. In the potato ballot, 66 per cent voted against the levy continuing, from a 64 per cent turnout. The order respects those democratically expressed views and the outcome of those ballots by removing all the legislative provisions for the statutory levy in those two sectors.

In addition, the order seeks to improve accountability for the remaining levy-paying sectors, which I mentioned a moment ago. It does that by imposing a new duty on the AHDB to deliver a regular vote by levy payers—at least once every five years—on what their levy will be spent on.

Finally, the order makes an amendment to the original AHDB order to clarify that the AHDB’s ability to charge for services includes all the industries in the scope of the order and not only those sectors that pay a levy. The amendment is purely technical and will ensure that, although the statutory levy is being removed for horticulture and potatoes, the rest of the order will continue to apply to those sectors. It means that, if they decided to, businesses in either sector could continue to work with the AHDB on a voluntary or commercial basis.

In addition to the provisions that are contained in the order, the AHDB consulted on a further proposal, which was on broadening the AHDB’s scope to further agricultural sectors. A majority of respondents in Scotland resisted that proposal and voted against it, and they highlighted that the AHDB should use this opportunity—following the vote and the removal of the levy in some sectors—to rationalise and deliver excellence in its service rather than expand it, so that has not been included.

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In summary, I support the changes that the order makes to give expression to the democratic views that are expressed by the horticulture and potato sectors and to introduce greater accountability for the remaining sectors. Looking forward, we will continue to work closely with the horticulture and potato sectors as they work to identify their priorities and the way in which they wish to organise themselves outwith the scope of the statutory mechanism. The draft order provides the flexibility that will enable them to do that on an individual subsector basis, and we will work with them as they decide what they wish to do.

That is plenty from me, but my officials and I are happy to answer any questions.

Thank you. It was a democratic vote by the horticulture and potato sectors, but what does that vote say about the quality of the services that are provided by the AHDB? What impact do you foresee the sectors experiencing as a consequence of leaving?

I think that it is an indictment with regard to what the horticulture and potato sectors felt was their experience with regard to value for money, the quality of the services provided and the accountability for decisions that were made and for what the levies were spent on. For the remaining sectors within the order, that second provision in the legislation ought to improve the circumstances, because there will be a vote every five years on what the levies should be spent on.

With regard to the future of the horticulture and potato sectors outwith the statutory mechanism, it is now open to them to decide either on a whole-sector or subsector basis how best to organise themselves and what they wish to prioritise. As I say, the Scottish Government is happy and willing to continue working with them on that.

The decision was made through a democratic ballot, but I would like to hear more about the engagement that you have had with the board about how the change will impact on its ability to reach out to provide voluntary or commercial services to the people in the horticulture and potato sectors who previously used those services. Does the change have an impact on the support that the Scottish Government will have to give to the AHDB?

On the first part of your question, which raises a sound point, there are a number of provisions that the AHDB would previously have provided to the horticulture and potato sectors that I think people in those sectors would still regard as important, including work on the fight against blights, aphid monitoring and applications for emergency pesticide use. Such things were previously arranged on a collective basis and I think that, now, conversations will be had about how best those services can be provided in future.

You ask about the interaction that we have had with the board. In the consultation, it was clear that the work on the application of fertilisers was identified as very important. The AHDB will continue to provide that until 2023. We have responded to what was asked for in the consultation but, as I say, it is extremely important to respond to democratic wishes as they are expressed, and it is now for those industries to agree how they wish to organise themselves, and we, the AHDB and others in the four nations of the UK are here to continue working with them.

It is just that the blight and aphid issues are driven through specific guidance in the potato sector that comes from Government. I suppose that, therefore, I would like your reassurance that you will not only continue to support the board itself but will provide support if things come to the point at which, for example, there might be job losses.

We need to make sure that Scotland is at the cutting edge of tackling blight and disease and ensuring that we do not have a pest issue. On behalf of the committee, I hope that we can get a reassurance from the Government that you will keep an eye on the situation.

I absolutely give that commitment. I do not anticipate any job losses as a result of the removal of the statutory levy. On the point about the continuing support for research and development in those areas—as well as for marketing, which is separate—we are absolutely there to provide that. Recently, we invested £2.2 million in research into potato cyst nematode, and that research continues in our world-class research facilities, including in the James Hutton Institute.

I will hand over to Caspian Richards in case he wants to add anything.

It is very much the case that the research expertise that we have in the James Hutton Institute and other facilities in Scotland is fundamental, and we support it through the strategic research programmes that we fund. Their ability to provide those services is fundamental to the long-term solution. We will wait to see what comes out of the industry discussions as to what form that will take and how we can support it.

Good morning, and thank you for coming.

What is the Scottish Government’s understanding of how the UK Government reached the decision to require the board to hold a regular vote at least once every five years and not more frequently than that?

It was not necessarily a UK Government decision; it was a joint Governments decision. To give you a bit of background to what happened, in 2021, growers in Lincolnshire gathered enough people to trigger a ballot. The ballot took place and, as I set out in my opening remarks, the majority voted to remove the levy. There was a consultation, which was developed by the UK Government and us, which spoke to some of the questions that were part of the ballot and to some wider questions. Within that was the point about how we ensure greater accountability for the remaining sectors.

On the provision to have a vote every five years, it is at least every five years, but the AHDB has already committed to do so more frequently. I expect that the first vote will be in April 2022. I will let Caspian come in on that, but the vote is to be at least every five years, although I would expect it to be more often than that.

The AHDB has gone out for the first time to the continuing sectors as part of that exercise, so it has just opened to growers in those sectors.

Does the Scottish Government think that having a vote more regularly than every five years would improve transparency and accountability? It sounds as though you would support more frequent voting.

Absolutely. Within reason, I would support consultations that are as frequent, broad and deep as possible with those who are paying the levy and for the services that the AHDB provides.

If levy payers reject the board’s proposals on how the levy will be spent, how can the levy payers influence the proposals? Can they make counter proposals? What is the process?

That is a good question. I am not sure that I have the detail of exactly what would happen if, in one of the votes, the levy payers rejected the proposals, but I am more than happy to come back on that point.

It would be most helpful if you could come back to the committee in writing on that question.

In your interaction with the potato and horticulture sectors on some of the issues, has the Government been alive to the wider challenges that those sectors have faced? Inevitably, I think of exit from the European Union, but are there others?

Absolutely. It is a tumultuous time for the sectors, particularly since EU exit when, at the stroke of a pen, the UK Government’s Brexit deal ended the Scottish seed potatoes market for trade into the EU virtually overnight.

The cabinet secretary, Mairi Gougeon, and I, along with our officials, have regular round-table meetings with the potato and horticulture sectors to get an on-going understanding of their concerns and how we can address them. To date, the concerns largely centre on trading opportunities post-Brexit—as I just mentioned, the EU market was cut off overnight—the availability, or lack, of a workforce, and supply chain disruption, on which Brexit, the pandemic and other global issues have had a huge impact.

Most of those areas are reserved, and we are in almost constant contact with the Home Office and the UK Government, making representations on behalf of the Scottish sector. So far, responses have been very disappointing, but we will continue to make representations.

In the meantime, we are providing support in the way that we can; for example, in R and D and in some of the ways that I mentioned to Rachael Hamilton, such as by investing in research into blight and other pests that cause problems for the industry.

You mentioned seed potatoes. What is your view on exactly where the problem lies with regard to Scottish seed potatoes? Is it a UK Government position or an EU position that means that seed potatoes cannot be exported as they were?

I am happy to answer that question albeit that I do not think that it is within the remit of what we are discussing today.

I thought that you raised it.

Yes, I did, and I am happy to answer the question.

It is a problem of dynamic alignment and the failure to reach agreement prior to Brexit taking place. That is undoubtedly the case, but what we need to focus on now is finding solutions that will allow Scottish producers to continue to trade with the EU and at the same time finding alternative trading routes in the rest of the world. We require the UK Government and the EU to get round the table to make progress on that.

Thank you.

As there are no further questions, we move to our next agenda item, which is formal consideration of the motion to approve the instrument. I invite Ms McAllan to move motion S6M-03604.

Motion moved,

That the Rural Affairs, Islands and Natural Environment Committee recommends that the Agriculture and Horticulture Development Board (Amendment) Order 2022 [draft] be approved.—[Màiri McAllan]

Motion agreed to.

Does the committee agree to delegate authority to me to sign off our report on our deliberations on this affirmative SI?

Members indicated agreement.

That completes consideration of the affirmative instrument. I thank the minister and her officials for attending.