Levy stoush ramps up

24 Jul, 2014 04:00 AM
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The Senate could potentially destroy the levy system that has brought great benefits to agriculture

AUSTRALIA'S mushroom, onion and mango industries have joined forces to push for compulsory levies to be retained and increased.

Representatives of the three industries have spoken out against Liberal Democratic Party Senator David Leyonhjelm moving a disallowance motion to scrap regulations lifting mushroom, mango and onion levies.

His disallowance motion was tabled in the Senate earlier this month and is scheduled to be voted on in the Senate in August.

It relates to three amendments to the Primary Industries (Customs) Charges Act 1999, lifting compulsory levies on mushroom, onion and mangoes.

The intertwined motions increase the levy on hard onions from $2 to $4 per tonne; the levy on mangoes from $1.75 to $1.893 per kilogram; and the mushroom spawn levy from $2.16 to $4.32 per kilogram.

However, the mushroom, onion and mango industries say the disallowance motion has the potential to bring down Australia’s world-leading agriculture levy system.

“The levy system underpins Australia’s agricultural research and development (R&D), marketing, plant and animal health systems that have made our nation one of the great agricultural producers of the world,” a joint statement from Onions Australia, the Australian Mango Industry Association and the Australian Mushroom Growers Association said.

The three groups also said the disallowance motion was tabled despite a rigorous five year consultation process, the investment of over $1 million of grower funds and AEC independent ballots, “meaning the will of growers may still be defeated”.

“Onion, mango and mushroom leaders are concerned that these disallowance motions send the signal that due process with regards to every agriculture levy can be ignored under the weight of external political pressure,” the statement said.

Last week, Senator Leyonhjelm urged the federal government to conduct a “serious review” to investigate how all agricultural R&D and marketing levies operated and whether they delivered genuine value to growers.

The new NSW Senator is one of eight crossbenchers holding the balance of power in the federal Senate.

But as the industry groups ramped up their campaign to retain their levy increases, Senator Leyonhjelm said he was open to a three-year plebiscite of all levy payers for various commodities, similar to the one conducted by Australian Wool Innovation (AWI).

The Australian Beef Association (ABA) has also pushed for a similar plebiscite of the $5 per head beef cattle levy that underpins Meat and Livestock Australia’s R&D and marketing activities, given the current federal Senate inquiry into that levy.

Senator Leyonhjelm said he met with Federal Agriculture Minister Barnaby Joyce and the National Farmers’ Federation (NFF) last week to raise his concerns about how agricultural levies are being collected and spent.

He said his push for an all-encompassing levy inquiry may be impractical and is likely to meet “lots of resistance, if I propose anything that’s deemed to be too radical”.

Senator Leyonhjelm said he would consider holding back on introducing future disallowance motions to block levy increases, if three year plebiscites were adopted by the various Research and Development Corporations (RDCs).

He believes levies are taxes on growers but the plebiscites would achieve the key aim of increasing scrutiny on how the money is spent, through a more democratic process.

“The people (RDC’s) who are spending the tax would need to account for themselves to the people who pay the tax,” he said.

In 2012-13, the Grains Research and Development Corporation (GRDC) generated about $200 million in revenue including $118.2m in grower levies and $62.8m in matching government funds, while the MLA collected $93.8m from sheep and cattle producers and $40m in federal funds.

Other groups like AWI, Horticulture Australia, Dairy Australia and the Cotton RDC operate under a similar funding structure.

Senator Leyonhjelm said Minister Joyce may be open to the introduction of three year plebiscites for the different levies, if the NFF and other farm groups supported the move.

“Getting a full review of all levies would be a huge job but convincing people to adopt three year plebiscites of levy payers, like AWI does, would be a much easier task,” he said.

Senator Leyonhjelm said the AWI plebiscite offered wool growers a range of options on paying the levy, including a zero payment option, and is conducted by the AEC.

But he said he’d prefer if the vote was based on the volume of production for each particular commodity like grains, rather than a one-vote one-value system which was “a formulae for fleecing the big guys”.

“I don’t think Barnaby Joyce is opposed to the idea but he may need a bit of a nudge and if the farm groups think there’s a good reason to do it, and it’s more democratic, that would make life simpler for the Minister,” he said.

“The people most in favour of retaining the levies are the ones who receive and spend the money.”

Australian Mushroom Growers Association chief executive officer Greg Seymour said there was an established process for grower initiated levy increases which followed rigorous and well defined government guidelines.

But he said this system was “now under threat from undue political influence”.

Onions Australia levy champion Brian Bonde said the levies had been requested by growers to invest for the benefit of all levy payers and had been approved by a majority of growers in these three industries.

“Each levy has been subject to the rigorous and transparent government guidelines for consultation with levy payers,” he said.

“The opportunity for opponents to argue against the proposed changes is a part of the consultation process which then culminates with an independent ballot conducted by the AEC.”

Australian Mango Industry Association chief executive officer Robert Gray said the three levies were a perfect example of industries investing in their own future.

He said it wouldn’t be right for the Senate to interfere with a democratic process where the majority of growers have voted to invest their own funds in programs that benefit their industry and all Australians.

“The Senate could potentially destroy the levy system that has brought great benefits to Australian agriculture and will diminish the opportunities for these industries to grow and deliver benefits to all Australians,” he said.

“Our industries will be active to ensure the Senate does not vote on August 26 to allow the destruction of Australia’s world leading levy system.”

Senator Leyonhjelm said he had questions about the validity of the plebiscites conducted on onion and mushroom growers and if his disallowance motion was to proceed, he’d argue that point.

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FarmOnline
Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

Rob Moore
24/07/2014 7:01:38 AM

So all the "Shopfronts" are going in to bat for their own survival..that is the levy iv drip feed. Safest job on earth once you can hide behind the legislated Levies act.While there is ONE grower left -they all have their comfy jobs in the city centres of all the state capitals. I see that NFF are having a few days in Cairns to work out what is good for us idiots via yet another armpit gazing "blueprint"..p.ss off and get a real job and pay for your own holidays. I asked the NFF very nicely to support my PPP Rule last year and they refused to evenrespond let alone pass an opinion on it! SHAME
Hollowman
24/07/2014 7:51:36 AM

So this is a couple of politicians and the large businesses that support them versus the majority of growers?
Farmer
24/07/2014 8:23:13 AM

This is easy, ask each group for mushies, onions and mangoes to do a detailed cost benefit analysis, detailed financial management report etc and PROVE what they actually do has benefited each industry. No blah blah, meaningful numbers and if it comes out that the levy resulted in reasonable improvements in product for all growers (I never hear from anyone by way of info or output from any of the levy recipients) or the levy shows cost effective marketing that increases sales so that levy payers are getting value for money. I suspect not much.
Archibald
24/07/2014 8:37:42 AM

Its time for a democratic vote on all levies on basis that is you pay levies you get one vote. Keep them or not?
bigfarm
24/07/2014 9:17:37 AM

tomatoes and melons haven't paid levies, are they disadvantaged? I agree with Rob Moore and it shows in the HAL review, levies are just mainlining jobs in the cities. The Cairns economy has done extremely well out of levy payers this year.
cv
24/07/2014 11:48:17 AM

Well done David, completely support you on this one. "potential to bring down Australia’s world-leading agriculture levy system" Is that all these guys contribute, a leading levy system?
Peter Williams
24/07/2014 2:11:05 PM

This 'Industry voice' sounds suspiciously like public servants defending their patch. Don't forget the MLA. A drain on all cattle owners.
angry australian
24/07/2014 2:32:14 PM

So the EO's of 3 associations are defending their way of life. Newsflash fellas, industry doesn't owe you a living nor those from research orgs with whom you are in partnership. India grew roughly 19 million tonnes of onions, how much did they spend on research? If marketing of mangoes is so successful why does the price in Melb. and Sydney often fall to barely economic to the grower? And making comments like, "made our nation one of the great agricultural producers of the world,” borders on an outright lie when you look at the FAO figures for those 3 products. Nice try fellas!
bigfarm
24/07/2014 6:50:17 PM

Is a plebiscite a vote? Trouble with the horticultural industry nobody has a list of levy payers. Just scratch the levy altogether, in reality the worlds changed and most industry funded research has already been adapted by leading growers years before, and the industry bodies are just followers. The HAL review said they were unaccountable and industry conflicts of interest, thats gotta be a mandate for scratching it, specially when they burn 30% of levies on administration. Disappointing if Barnaby doesn't do this.

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