The Potato Industry Development Council, known as the British Potato Council, is an executive non-departmental public body. It was established by the Potato Industry Development Council Order 1997, under the provisions of the Industrial Organisation and Development Act 1947. It exists to commission potato research and development; to transfer technology; to collect and disseminate market information and to promote potatoes in the UK and overseas markets.
The BPC is self-financing through a statutory levy on growers and purchasers of potatoes which raised approximately £5.85 million in the year 2000–01. It carries out important work for the potato industry and I know that DEFRA Ministers appreciate its achievements at a difficult time for the industry.
The major changes proposed in this order are the raising of the minimum levy thresholds for both growers and purchasers and the establishment of a dual levy rate system. The increased thresholds will relieve smaller players of the financial burden of the levy and reduce the BPC's administrative costs. The dual levy system, with a basic rate, and a higher rate for late payment, will act as an incentive for punctual payment and further reduce the BPC's administrative costs. The order also proposes that when growers and purchasers do not provide annual returns by the due date, BPC estimates based on previous information can be increased by up to 10 per cent. This will allow for estimates to reflect upward planting and market trends as appropriate. The net result of these changes will be to direct more of the levy to the front line tasks of the council. The amendment order also proposes some minor cosmetic changes. The order will come into effect on 1st January 2003. I commend it to the House.
My Lords, I thank the noble Baroness for presenting the order. The order has the support of the devolved administrations and of the British Potato Council. As the noble Baroness said, it does not result in any increase to the Exchequer, as I read it, but is calculated to yield a net benefit to the British Potato Council of some £40,000 per year. It also reduces administration costs which must be welcome. It is calculated to benefit the potato industry by approximately £99,000 per year. That benefit will accrue to the smaller producers and merchants, which we welcome.
However, I have two questions for the Minister. First, the change in the statutory date for making planting returns from 15th May to 1st June is a good idea as it ties in with the IACS deadlines. That seems common sense. Has consideration been given to a wet spring occurring and planting being delayed? Is there any flexibility in the dates laid down in the order? Could they be altered or a derogation made? Nowadays as a result of climate change, it is not unusual regularly to experience very wet seasons.
Secondly, two levy rates for both growers and purchasers exist at present: a basic rate where payment is made by a due date, and a higher rate for late payments. These new proposals will catch those members who have paid on time and who have in the past received a £1 discount. I understand that that applied to about 70 per cent of members. It would be unfair if they lost out under the new system. The noble Baroness is probably aware that the £1 discount has never featured in the Potato Industry Development Council Order. I hope that when the noble Baroness replies to the debate she will comment on that matter.
As the noble Baroness will be well aware, potato prices for free market potatoes are desperately low. The order should help some of the UK's smaller producers and merchants which we welcome. We support the order.
My Lords, on behalf of these Benches I thank the noble Baroness, Lady Farrington, for presenting the order. I agree with many of the comments made by the noble Baroness, Lady Byford. It is clearly beneficial for small producers and purchasers to be removed from the requirements of the scheme. We very much welcome that. We welcome the fact that bureaucracy, and the amount of money that the British Potato Council spends on bureaucracy, will be reduced. We also welcome the changes with regard to the dates for providing information relating to the planting and lifting of potatoes. I await with interest the response to the sensible question asked in that regard, given the fact that our climate appears to be increasingly erratic.
I have a further general question. I understand that the constitution of the British Potato Council allows for only one marketing specialist member out of 16 members. Given the present state of the market, to which the noble Baroness, Lady Byford, referred, are the Government satisfied that enough proactive marketing is taking place? We on these Benches support the order.
My Lords, I thank the noble Baroness, Lady Byford, and the noble Lord, Lord Greaves, for their comments. The early payment discount is not covered by the order. Its replacement by a dual levy rate provides legal certainty. However, the loss of the early payment discount will be taken into consideration when the British Potato Council sets its levy rates for future years.
I welcome the recognition on the part of the noble Baroness and the noble Lord of the important issue of help for smaller producers. An important part of the council's work comprises disseminating accurate market information. Prompt submission of returns is essential for that and also helps the council to pursue the promotional activities that the Government, the council and the noble Lord, Lord Greaves, wish to see.
The BPC will look kindly on returns that are submitted late due to difficult planting conditions. The order proposes to extend the deadline from 15th May to 1st June to allow returns to be submitted with greater certainty in seasons when planting conditions are difficult. I hope that I have covered the points that were raised.