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Cost Benefit Analysis

Publication Date: 
3 July 2015

In 2011 AHDB Potatoes introduced a new objective to analyse cost/benefit across its functions. More than just a trumpet-blowing exercise, the project seeks to:-

  • Instil in our staff, an earnest, custodial attitude to how the levy is spent
  • Quantify more precisely, how industry benefit can be derived from our activities
  • Capture cost/benefit across all our activities over a number of years

Results in the first round of evaluation clearly demonstrate how our activities contribute to industry’s bottom line. Each example is supported by detailed calculations (published for BP2011) and staff will be on hand to talk press and levy payers through the calculations along with other positive examples of their work. So far we have evaluated about 10% of our budget. Examples are:-

Marketing and Corporate Affairs
We currently spend £250 000 p.a. on sustaining demand in the fresh sector. The project yields a further €270 000 p.a. from the EU and covers a range of activities under the Many Faces of Potatoes banner. In one year the project has generated £2 million of positive press coverage with 54million opportunities to see the campaign messages. Our conservative assumption is that the campaign protects one meal with potatoes every fortnight for 5% of shoppers. This yields £3.17m at retail each year.

Seed and Export
We spend £24 000 p.a. on export mission work in conjunction with Scottish Government to ensure trade and phyto-sanitary relations are maintained. Of this £4 750 p.a. is spent building and maintaining positive relations with Egyptian officials. In 2011 the positive relationship enabled us to obtain  an extension on the official trading window following poor weather that prevented shipping. Potato seed worth £696 400 seed (3 482 tonnes) was traded during this extension.

Knowledge Transfer / Exchange
Over eight years we have invested £500 000 into research on irrigation and common scab control. The programme has identified many cases sub-optimal water-use and if adopted across the industry, recommendations derived from the research are set to save industry £2.2million p.a.

Research and Development 
Over three years we spent £35 000 on herbicide research following a review of pesticide availability resulting from revisions to European pesticide legislation. New weed control strategies have been derived and although available herbicides are more expensive than previously, the recommendations save the equivalent of £63/ha compared with more cumbersome mechanical options. Even if only 10% of growers adopt these recommendations the project will save industry £390 000 each year.

SuttonBridgeCrop Storage Research
Over three years we spent £85 000 p.a. in partnership with Glasgow University researching the optimal use of CIPC. The project identified savings of up to 50% CIPC used, especially in the processing sector. Assuming only half of the saving is realised across 50% of the processing sector, the project will return £513 000 to industry each year.

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