Potato growers face legal action over final AHDB levy payment

The AHDB is warning potato growers who failed to submit a 2021 potato planting return form and who refuse to pay this year’s levy that they face the prospect of legal action.

It is understood that about half of all growers declined to fill in their annual return following the vote earlier this year to scrap the potato sector board, prompting the AHDB to produce its own estimates of how much each one owes.

See also: AHDB pledges to deliver better value for farmers

This has been communicated in a letter to each grower concerned from AHDB finance director Naveen Gupta, still inviting them to submit an official planting return, but also providing the estimated levy due based on past plantings.

“If you fail to make a return or inform the board that you are not liable to pay levy within 28 days of this notification of the estimate, you will become liable under Article 7(2) of the order to pay levy in accordance with that estimate,” he wrote.

Legal process

In a separate letter to growers, Mr Gupta states that “AHDB will remain legally required to pursue all overdue levy payments and any debtor that refuses to pay will be pursued through the legal process”.

The correspondence with growers explains that the money is needed to meet the costs of winding down AHDB Potatoes and is being charged at the same rate as last year – £42.62/ha planted.

This is expected to raise £5.6m, which will be added to the £1.2m held in AHDB Potato reserves.

That will not be enough to meet total wind-down costs of £7.4m (see “Breakdown of wind-down costs”), but to avoid the need for any further levy collection in 2022, Defra has agreed to underwrite the remaining £600,000 shortfall.

Interim potato sector board chairwoman Alison Levett said she understood that many growers, having voted to stop the levy, would feel frustrated at being asked to pay one again this year.

“However, I would ask you to recognise that we cannot simply abandon our contractual liabilities or not honour legal redundancy processes.”

Ms Levett also revealed that the AHDB would be setting up a “legacy package”, including a website giving access to past research reports, knowledge exchange documents and market intelligence.

Horticulture

Meanwhile, Hayley Campbell-Gibbons, outgoing chairwoman of the AHDB Horticulture board, has written to horticulture levy payers, explaining why they too face a “final bill” to balance the accounts.

As well as outstanding research projects and redundancy costs, funds are needed to keep the Extension of Authorisation for Minor Use programme going for a further year, “at Defra’s request”.

To secure the funds, past levy payers have been sent an invoice/estimated invoice, but at a reduced rate of 0.27% of turnover, compared with 0.45% last year.

This is expected to raise £4.55m, which added to reserves of £6.05m will cover the aniticpated wind-down costs (see “Breakdown of wind-down costs”).

Final decisions on the winding-down of AHDB Potatoes and AHDB Horticulture rest with the government, and a consultation is expected before the end of this year.

Breakdown of wind-down costs

Potatoes

  • Contractual liabilities, including research programmes: £4m
  • Contractual liabilities for potato storage programmes: £600,000
  • Lease commitments and staff redundancies: £1.7m
  • Closing Sutton Bridge (including redundancies and sale proceeds): £1.1m

Horticulture

  • Contractual liabilities, including research programmes: £7.4m
  • Lease commitments and staff redundancies: £1.4m
  • Transition of Extension of Authorisation for Minor Use service to 2022-23: £1.8m

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