Ag levy review 'overdue'

23 Jul, 2014 02:00 AM
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29
 
Senator David Leyonhjelm.
In my view the whole system of levies...is overdue for review
Senator David Leyonhjelm.

LIBERAL Democratic Party Senator David Leyonhjelm is urging the federal government to conduct a “serious review” of all agricultural research and development (R&D) and marketing levies.

He said R&D levies are easy to justify and “not all of them are justifiable”, however marketing levies are hard to justify.

“I would like a serious examination of these things,” he said.

Senator Leyonhjelm said he was signalling to the government he would attempt to disallow regulations doubling the levy on mushroom and onion growers and imposing an increase in the levy on mangoes.

But he’s also signalling to the government he’d be happy to advance talks about the “overall picture” for agricultural levies.

His urging comes as the reporting date for the Rural and Regional Affairs and Transport References Committee’s inquiry into the grass-fed cattle levy has been extended to September 23, after it was due last week.

But rather than expanding that investigation’s terms of reference to include other agricultural levies, Senator Leyonhjelm said a separate investigation was needed.

“When you get into a specific levy, you look at the individual industry characteristics, and that’s what they did with beef cattle levy,” he said.

Senator Leyonhjelm said the inquiry must take an overview of agricultural levies and consider whether they’re a good idea, presented value for money and the mechanics of how they operated.

“In my view the whole system of levies, from deciding whether to introduce them, whether to retain them, how high they ought to be and how to spend the funds, is overdue for review,” he said in an opinion article last week.

Senator Leyonhjelm’s proposal comes after Fairfax Agricultural Media conducted a recent survey which showed 75 per cent of respondents didn’t know how much they paid in levies each year.

It’s estimated that farmers contribute $370 million per year in compulsory levies to fund organisations like the Grains Research and Development Corporation or Meat and Livestock Australia along with matching federal government contributions of about $200 million.

Shadow Agriculture Minister Joel Fitzgibbon said he was “very relaxed” about an inquiry into the levy system as per Senator Leyonhjelm’s proposal.

“I don’t think an inquiry can do any harm and I believe every system can always be made better,” he said.

In his 12 months dealing with the agricultural portfolio, including time as minister leading up to last year’s federal election, Mr Fitzgibbon said he’d received various complaints from different groups about the levy system.

He said the nature of the levy system meant there would always be someone unhappy with paying levies because the benefits they derived are not always obvious.

“I’d expect to get complaints and again I’d never expect such a big system to be perfect,” he said.

Mr Fitzgibbon said he supported the Rural Research Development Corporations that received levies, given the “architecture” underpinning the system was instigated by former Labor Agriculture Minister John Kerin in the mid 1980s.

“You won’t be surprised to hear me say that I think the levy system is a very important part of our R&D and marketing effort,” he said.

“It’s about making sure everyone collectively contributes and that one group of people are not paying for something that’s benefitting others.

“I’m a strong supporter of our RDCs and the levy system.”

Mr Fitzgibbon said he supported the Minister’s ongoing oversight of RDCs and the levy because “industry groups don’t always get these things right” because “vested interests come into play”.

“I think it’s important that the Minister, at the end of the day, approve the levies and any inquiries into the levy system," he said.

“Our RDCs do a good job and paying a levy is rarely welcomed by the person paying the levy but all those paying the levy have been net beneficiaries of the levy system.”

One of the eight minor and independent crossbench Senators, Victorian Democratic Labor Party Senator John Madigan said R&D was critical to improving farmer returns.

But balancing the concerns of all levy payers - large, medium and small operators - was the key challenge.

“We’ve got to find a way forward that’s fair to everyone and doesn’t disadvantage one group over another; that’s the big challenge and the devil is in the detail,” he said.

Senator Madigan said he hadn’t seen the detail of Senator Leyonhjelm’s proposal or anything in writing, to say whether he supported the disallowance motion on the mushroom levy, or a broad-ranging inquiry into all levies paid by farmers.

“I can see that farmers are working longer and harder and they’ve increased their productivity enormously but they’re getting paid less but farm debt has increased exponentially over the pasty few decades,” he said.

“I’m really conscious of the fact it’s getting so much tougher for farmers and the thinking and policy to date has not delivered economically, socially or environmentally for our farmers.”

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Colin Bettles

Colin Bettles

is the national political writer for Fairfax Agricultural Media
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READER COMMENTS

mbh
23/07/2014 6:09:39 AM

While you're at it David, why not propose a serious examination of the overall welfare payment system paid for by the 'mug punter' taxpayers too.
Deregul8
23/07/2014 6:23:26 AM

GRDC funded the development of the variety Mace which 80% of WA now grows. Why then are growers now also paying an EPR of $3.50/t for a variety they produced as well as further GRDC levies and charges. Blatant case of double dipping. Growers have no ownership over there very significant research investment, and there is no accountability into how these funds are spent. Its time to drop the compulsory aspect and farmers will drive research themselves as needs arise.
Cronus
23/07/2014 6:25:51 AM

This comes from a man who wants all Agriculture departments closed, as an agribusiness consultant one wonders if self interest is involved! Recipients of levy funds should demonstrate value per se. Inquiries seem to take forever producing no benefit. Require all levy schemes to report costs, processes and benefits. Be careful though, long term work does not fit short cycles and some will provide a "no" answer. One must let a thousand flowers bloom to find the winners.
Small Farmer
23/07/2014 6:50:04 AM

Well overdue, a levy in many cases is another tax and cost, often supporting an office full of paper shufflers who produce nothing but meaningless reports that farmers don't read. What would be good is to make levy imposers outcome driven, in most cases there is no net positive outcome for producers for levies. Stop the levy system rorts that exist would be a positive step. Its ironic that the LNP are being shown the way by an LDP Senator and the government almost mute on agricultural issues.
angry australian
23/07/2014 6:53:56 AM

Don't stop at farming David, forestry and fishing also have to put up with this rort.Since the inception of these organisations has anyone done a cost/benefit analysis? The R&D corps. have poured money into CSIRO and unis for research that never seems to go anywhere,and the authorities like MLA,AWI, AFMA cannot demonstrate how there management has improved the long term economic return to our nation by even a single dollar. These levies are a pre-profit tax on our producers and are contributing to the pain in our rural communities to empire build in Canberra.
Archibald
23/07/2014 7:34:17 AM

Marketing levies should be paid for by those that actually receive the benefit. Livestock producers pay levies for marketing meat; this does not result in improved prices for livestock by the absurd idea that trickle down occurs!! Do the iron ore miners pay a levy so that OneSteel and BlueScope can market steel??
farmed
23/07/2014 7:52:14 AM

we paid $11,000 for levies on milk last year. i asked the governing body to help us negotiate a better deal with my processor. they said we cant get involved in anything related to price. when we're all broke then we wont have to worry about levies.
angry australian
23/07/2014 7:55:25 AM

One thing the R&D corps do seem to have in common,they all seem to produce a "wonderful" magazine which all seem to have heaps of photos of the managing director and the current minister. It might be cheaper to buy space in rural newspapers than waste research dollars on self aggrandisement!
Peter Williams
23/07/2014 8:22:32 AM

The MLA magazine would be the greatest waste of paper that I have seen. All wonderful people spending MLA money on go nowhere projects.
pro-research
23/07/2014 10:30:35 AM

Im really struggling with the whole debate of moving to a voluntary levy system that you seem to be suggesting Derugul8.Do you honestly think any farmer would pay a levy if it was voluntary? Be serious here! I hold grave concerns for the future of grower groups and the future of applied R&D if the move is made.Deregul8 are you a member of a grower group by chance? Because if you were I know you would see first hand the benefits of GRDC and MLA levies.An overhaul is needed yes but we face a serious decline in productivity is there is not some compulsory nature to funding R&D.
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