Biosecurity Levy Discussion
In March of this year the ATGA became a signatory to the Emergency Plant Pest Response Deed (EPPRD). News of this was announced through the May 18 Newsletter.
As a result, the Truffle Industry gains, among other things, the opportunity to participate in any Emergency Plant Pest response undertaken where our industry is directly affected. We have, on behalf of the industry as a whole, agreed to share in the costs associated with that response in exchange for the Govt underwriting and meeting those costs in the first instance.
This is something akin to taking out an accident insurance policy, with an excess payable should any accident occur resulting in a claim.
As part of the EPPRD, the ATGA needs to come up with an agreed method of funding our cost sharing obligations. That method could be through:
Funding from the industry or association coffers,
A voluntary levy on industry participants or
Through the implantation of a statutory levy.
We must be able to satisfy the Govt that the funding method will be able to meet our allocated share of any EPP response.
The ATGA committee has formed a sub-committee (Biosecurity Levy Sub-Committee) to further develop the statutory levy approach.
This approach is used by a slew of other horticultural industries, is initially set at 0% and, should a cost arise from an EPP response, a value set for that levy.
The sub-committee has met twice in the period between harvest end and the AGM.
The meetings have focused on developing a complete understanding of the requirements and processes invlolved in implementing an EPPRD levy.
A critical component of our levy implementation is the development of a communication plan to inform all growers involved in the industry of the context behind the levy and details of the proposal once developed. We must be able to demonstrate that everyone has had the opportunity to comment on the proposed levy.
Any proposal for a levy must meet 12 principles set down by the Govt via the Dept Agriculture, Water Resources. Failure to meet any one of these principles will result in the proposal being rejected by govt.
A levy proposal must allow all industry participants to vote on its merits via a ballot.
A levy proposal must estimate the amount to be raised. It must propose a mechanism for levy collection. This mechanism must be efficient and practical, impose a minimum of red tape and must satisfy accountability and transparency requirements.
The full Levy Principles and Requirements is a public document, and can be found on the DAWRS web site.
At this moment, there is no levy, and, we have yet to develop a proposal. It is very much a work in progress for our sub-committee.
Our Cost Sharing Obligation
The EPPRD specifies that there is an upper limit of 2% of the local market value of production (LMVP) on any industry.
Assuming a LMVP of $10M results in a cost sharing allocation of $200,000.
This may be repayed over a period of up to 10 years. Interest on the outstanding amount is payable at the CPI rate.
A number of challenges have been identified, particularly in relation to grower groups falling outside the membership of ATGA/TPWA/Victorian Growers Group and discussions are on going in terms of locating and reaching out to these growers.
There are some unique considerations in examining the basis of any levy. For the Australian Truffle Industry (ATI). Truffieres include plant combinations of oaks, hazelnuts and other varieties. Any incursion affecting those plants has the potential to affect other industries involved in the propagation/use of these varieties. Truffles are unique to our industry.
The ATI model differs considerably between the eastern states and Western Australia. Eastern states producers export a significantly lower proportion of their crop and many add value via direct sales. WA growers typically sell their crop through established local distributors who sell this on to a mainly export market.
As mentioned earlier, the EPPRD levy has already been implemented across a number of horticultural based industries, so we are not trying to reinvent the wheel. The Levy Principles and Guidelines offer a high level process through which the committee can work.
That process may be summarized as:
1. Identifiy the need for a levy (in our case it is to meet our obligations under the EPPRD)
2. Discuss the initial proposed levy with DAWRS (completed)
3. Develop a plan for how much levy is needed, how it will be spent, how it will benefit levy payers and how it will be collected.
4. Develop a plan for industry consultation
5. Develop a plan for a ballot on the levy
6. Discuss progress of the levy proposal including consulting and voting plans with DAWRS and seek endorsement of the plan
7. Conduct consultation process and conduct an industry ballot
8. Finalise the levy proposal, incorporating consultation outcomes and ballot results and discuss the final draft with DAWRS
9. Submit the proposal to Minister or Parliamentary Secretary for consideration
We are currently working across points 3 to 5
The full process will take a good deal of time and the dedication of resources from within and outside ATGA. We will be analyzing the engagement and cost of those outside resources to ensure the whole process remains viable and cost/time efficient.
The consultation process cannot be rushed and objections must be documented, considered, commented on and included in the levy proposal submitted for revue by the DAWRS.
There is much work to be done. You, the growers, will be involved and will have a say.
Watch this space.