21 st July 2020 21 st July 2020 Sophie Churchill, Alison Levett, Rob Clayton, Jim Cargill, Rebecca Geraghty, Jonathan Papworth, Sophie Churchill, Alison Levett, Rob Clayton, Jim Cargill, Rebecca Geraghty, Jonathan Papworth, Mark Wilcox, Chris Wilson, Tom Hind, Andrew Skea, Daniel Metheringham, William Shakeshaft, Mark Wilcox, Chris Wilson, Tom Hind, Andrew Skea, Daniel Metheringham, William Shakeshaft, Michael Whelham, Nick Skinner, Jimmy Phillips Michael Whelham, Nick Skinner, Jimmy Phillips
Housekeeping @AHDB_Potatoes URL: ahdb.org.uk/potatoes
Agenda • Potato Levy review • Levy Q&A • Future storage strategy and progress (circa 11.30am) • Storage Q&A • General Q&A
Levy review - recap • High frequency of references in DEFRA’s Request for Views • Submissions not detailed enough to differentiate the principles (area / tonnage) from the tactics (robust debt collection) – need to. • Regional discussions cover flooding and related issues • Deadlines relaxed in 2019 to cover protracted harvest • January meeting we agreed:- • Some grower members content with current process • To initiate review of potato levies • Start with industry / stakeholder discussion then proceed with technicalities
Issues covered previously • Types • Area / tonnage / turn-over • External relationships (other data providers, plant health agencies) • Internal relationships (MI, storage etc.) • Volatility • How would we cope with 2012 conditions back to back • Fairness • Turnover – value add • Area – emergence or flooding / harvesting • Tonnage – differences in volume:value • Representation in a changing industry • Collection • Leakage and audit • Multiple counting
Progress and timeline • Scheduled for March meeting - 1 st to suffer lockdown • Stakeholder advise – not to pursue during early phases of lockdown • DEFRA review of Statutory Instrument next Spring • Groundwork needs completing now to September • Specifics • Area v. tonnage • Planted area v. harvested area • Collection and payment incentives
Area v tonnage Area Advantages Disadvantages We can Measure Difficult to pinpoint Grower GIS link established Unfair for croploss - growers disadvantaged in wet years RPA Data link established Varieties Penalised Well Known Method A lot of work (2.7m Fields) Portal runs smoothly Punishment of low yield No extra resource Plant health DSA's (SASA & APHA) AHDB income forecast link established Can spot, detect and report fraud MI Info link estabished • Recommendation • Maintain area record as basis for calculation
Area v tonnage Tonnage Advantages Disadvantages Portal runs smoothly Leakage in supply chain Easily auditable Economic impact analysis (-27% yield in 2012) Trusted in C & O/RM Plant health No Arguments over crop loss GIS, DSA's compromised No field officer needed No MI info/reports If we operate trust - buyers need to be trained High yield low margin penalised How do capture vertical ontergration How do we levy on 1st purchases only? Revenue forecast emerges later in year Recommendation Maintain area record as basis for calculation
Area planted vs. area harvested. • Recognising the point at which crops are genuinely un-harvestable • Grubbed up or disc-ed in • Idea would be to continue current area based mechanism but introduce a “claw back” process based on evidence of no harvest. • Would need to be worked up • What unambiguous evidence would count • What cut off date • How to audit • Proposal • Working group to meet Aug / Sept to provide achievable solution. • Possibly levy team / affected growers / NFU / NFUS
Softer collection tactics • Currently we can:- • Invoke criminality against failure to make returns (although we don’t) • Make estimates for missing returns • Impose 10% penalty for significantly late settlement. • Proposal • Remove ability to invoke criminality • Maintain estimate and settlement penalties BUT • Introduce more modest fixed fines as a first resort. • Eg. £100, £200 or £300 penalties depending on lateness • 10% penalty would be retained for worst cases • Financial modelling still to complete.
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