SUBMISSION
ProductivityCommissionReviewofregulationinAgriculture
Date
18thAugust,2016
AboutGrainProducersAustralia
GPAisanationalRepresentativeOrganisation(RO)forthegrainsindustryinaccordancewiththePrimaryIndustriesandEnergyResearchDevelopmentAct1989(PIRD),andhaskeyresponsibilitiesunderthePrimaryIndustries(Excise)LeviesAct1999andthePrimaryIndustries(CustomsCharges)Act1999.
GPAissupportedbyGrainlevypayersinAustraliaandthroughdirectgrowermembersandstatemembersinGrainProducersSA,VFFGrainsGroup,NSWFarmersAssociation,WAFarmersGrainsCouncil,WAGrainsGroup,TasmanianFarmersandGraziersandAgforceGrains.
ChairmanGrainProducersAustralia
ProductivityCommissionreviewofRegulationinAgricultureGrainProducersAustraliathankstheProductivityCommissionfortheopportunitytoputforwardourviewsregardingthedraftreport.TheGPAsupportthemajorityoftherecommendationsincludedinthedraftreportpreparedbytheProductivityCommission(theCommission).
• GPAsupporttheremovalofstatebansoncultivatingGMcrops.Therigorousnationalregulatorysystemthathassuccessfullybeeninplacefortwodecades,combinedwiththegrainsindustriesprovenabilitytosegregateandmanagemarketrequirementsmakesitunnecessarytomanageanysupposedmarketaccessissuesviamoratoriums.Restrictingfarmers’accesstotechnologiesagainsttherecommendationsofasciencebasedregulatorysystemisunnecessary.
• GPAsupportstherecognitionofinternationalresearchasevidencefortheregistrationprocessforagriculturalandveterinarychemicals.
AnyactionsthatwouldleadtoareductioninthetimetakenforregistrationofagvetchemicalswouldhavemultifacetedbenefitforAustralianfarmers.Encouragingcompaniestoregisteradditionalusesforchemicalsandallowingthemtoutilisedatafromresearchalreadyundertakentosupportregistrationinanother(regulatorycomparable)jurisdictionswillsubstantiallyreducethecoststothegrainsindustry.Australiaisacomparativelysmallmarketforchemicalswithahighlycomplexandinsomecasesduplicatedregulatoryregimeforregistration.Currently,substantialindustryfundsareexpendedtoassistcompaniesbyproducingtheadditionalresearchrequiredtosupportpermitapplicationsandadditional“use”registrationapplications.ThereiscurrentlyadisincentiveforcompaniestoregisternewchemistryinAustraliaduetotheexpensesofourregistrationprocess,regardlessofwhethertheirproductisalreadyregisteredforthesameusesinothercountrieswithsimilarregulatorysystems.GPAwouldalsoagreewiththeCommissionthatinsomecasestheriskversusregulationprocessisoutofproportion.TheGPAdoesnotsupporttheuseoftheprecautionaryprincipleasabasisforregulation.InoursubmissiontotheDeloittereviewofduplicationoflabelingforagvetchemicals,weoutlinedbothourconcernsregardingtheimplementationoftheprecautionaryprincipleandthecostsoftheunnecessaryduplicationofthelabelinglawsforAgvetchemicals.Belowisanexcerptofoursubmissiontothereview,thesituationoutlinedbelowclearlyillustratesasituationwheretheregulationandthereforecostsimposedfaroutweighsanyidentifiedrisk.
Reducingduplicationofregulationandlegislation,whichimpactsonagriculturehasbecomeakeyfocusoftheFederalGovernment.However,theplannedJanuary2017implementationofSafeWorkAustralia(SWA)ModelWHSRegulations2011willimposeconsiderableextraregulatorycostsontheagriculturesectorandultimatelybepaidforbyfarmers.SWAandtheDepartmentofEmploymenthavecontinuedtopromotetheirperceptionthatthereisaneedforadditional“precautionaryprinciple”basedhazardwarninglabelstobeplacedonallagriculturalchemicals,regardlessofusepatterns,userestrictionsorevenwhethertheproductformulationitselfreducesrisks.Itisestimatedthattheimpositionoftheseadditional(andunnecessary)labelingrequirementswillcosttheagriculturesectormorethan$55million,costswhichwillbeborneultimatelybyfarmers.SWAandtheDepartmentofEmploymenthavethusfarrefusedtorecognisetherigoroftheAPVMAregistrationandlabelingsystem,insteadpushingaheadtoimposeanadditionalandinmanycasesscientificallyinferiorhazardidentificationandlabelingsystemwithnoevidenceoreitherneedorbenefit.1
• GPAsupportsbettercoordinationandsimplificationofregulationsimpactingonagriculture
TheCommissionhascreatedthebasisforanationalconversationaboutunnecessaryregulationandwhereregulationreviewprioritiesneedtobe.WhereanationalregulationcoversaparticularareaofriskmanagementitshouldnotbenecessaryforaStatetointroduceadditionalorcompetingregulation.Thecurrentlackofconsistencybetweenstatesandinsomecasesatastatelevelbetweenjurisdictionscausesunnecessarycomplexityforcomplianceandcost.Thelackofaccountabilitywhendepartmentsimplementduplicativeregulationorregulationwhichunderminesnationalregulationsisanissuethatneedstobeaddressed.
• TherecommendationsforreviewofbiosecurityregulationTheGPAsupportstheCommissionsstatementregardingthelackofcoordinationbetweenjurisdictionsandtheneedtobreakdownthesilos.TheGPAalsostronglysupportstheneedtosettheprioritiesforthenationalinvestmentonbiosecurity.WewouldagreethatclearernationalleadershipwouldimprovetheAustralianbiosecuritysystem.Thereisalsoneedtorecognisethatinordertoachieveatrulyeffectivenationalbiosecuritysystemtheremaybeneedtointroduceratherthanremovesomeregulation.
1AfullcopyofoursubmissiontotheDeloittereviewofagvetchemicallabelinghasbeenprovidedasanattachment.
WhilsttheGPAbroadlysupportsthereportwedohaveconcernsregardingsomeofthepreconceptionsunderlyingthereport.Itappearsinsomekeyareaswithinthepaperthereisanunderlyingpremisethatonlywiththeremovalofregulationcanproductivitygainsbeachieved.Whilstinsomecasestheremovalofregulationwillachieveareductionincostsforfarmersduethetoremovalofunnecessaryredtapeandtheassociatedcompliancecosts,insomecasestheonlywaytoachievebetterefficiencyistoimprovetheregulationortobroadenitsapplication.Insomecasesitisfarmoreefficienttohaveclearlydefined,prescriptiverequirements,whichlimittheconfusionandprovideclarityregardingregulatoryrequirements.ItmayalsomeanamoreconsistentoversightbyregulatoryagenciesForexample;GrainProducersAustraliahaveconsistentlysupportedtheneedforamandatorystocksreportingsystembackedupbylegislation.Avoluntarysystemhasbeentrialedbutduetoitslimitedscopeandthelackofcooperationbycompanieswithavestedinterestinmaintainingsoleaccesstotheinformation,itwasnotsuccessful.Unfortunatelytoooftenactions,whichshouldfallintothecategoryofindustrygoodfailbecauseofthecompetingneedtoutiliseinformationforindividualcompanypowerandprofit.Theestimatedcosttothebroadergrainsindustryofnothavingatransparentstockreportingsystemhasbeenestimatedat$20pertonneinlostmarketopportunities.Withoutamoretransparentandaccurateunderstandingofstocksavailabilityandmovementactionsrequiredtomanageabiosecuritythreatwillbelesseffective.CurrentlytheABScollectsdatafromgrowersonayearlybasis,howeverthetimelagbeforethisdataismadeavailabletotheindustryandthelackoflocationmappingmeansthatitwouldnotbeofanyassistancewithregardsmanagementofadiseaseoutbreak.Amuchmoreappropriateandeffectivestocksreportingsystemmustbeimplemented.Webelievetheinformationthatmustbekeptwouldcoverallmajorgrainsheldinstoragefacilitieswithcapacitygreaterthan5,000tonneintheportzone.UpdatesprovidedandtheendofeachweekduringHarvestandMonthlythereafter.Theinformationrequiredwouldincludegraintypeandsegregationbymillingandfeedgrade,someofthisinformationwouldonlybeprovidedonasecurewebsiteforaccessbyregisteredexporters.
• TransportregulationsTheGPAsupportstheconcernsraisedbytheCommissionregarding:
o Theinconsistentheavyvehicleregulations,o Theroadaccessrestrictions,
o Theprocessingtimeandcostforthepermits,ando Therestrictionsonmovingagriculturalmachinery.
Thereisaneedforanationalfocusfromregulatorstoacttostreamlineinconsistentroadrulesbetweenjurisdictions.InmanycasestheGenerallytheGPAsupportsariskbasedregulatorystructurewheregeneralisedregulationisusedratherthanprescriptiveregulation.Itisimportantthatsomeregulationsarereviewedandpotentiallyremoved,inthecaseofsomeoftheroadaccessrequirementstheregulationisclearlydisproportionatetotheriskposed.
• BiosecurityWhilstonthefaceofitcurrenttrespasslawsshouldbesufficient,inpracticetheunwillingnessofpoliceandstateprosecutorstoappropriatelychargethosewhotrespassonfarmswiththeintenttocausedamage.Inadditiontoamoreconsistentapproachtochargingandprosecutingthosewhotrespassonfarm,thereisaneedtoconsiderwhetherthedraftingoflegislationandregulationwhichcreateandthenprotectfarmbiosecurityzoneswouldprovidetheprotectionsomefarmingindustriesareseeking.
• RighttofarmFarmersshouldhavetherighttoactwithintheboundsofgoodagriculturalpracticewithoutnon-farmersbeingabletostoplegitimatefarmingpractices.
• NativevegetationremovalTheGPAagreesthereisneedtoensurebetterclarityregardingNativevegandbiodiversityconservation,wesupporttheneedforrecognitionofthecostsimposedonfarmersoflockingupandleavingparcelsofland,theongoingmanagementcostsandtheperverseoutcomesthatoccurwhenstiflinglawsareimposed.Weedandpestmanagementandtheassociatedcostsarewillinglycarriedoutbymostfarmersaspartoftheircommitmenttomanagetheirlandandimproveproductivity,andwesupportthedevelopmentofamoreappropriatewayofprovidingregulatorysupporttoensureactionsaretakenandsupportedorenforcedasnecessary.Weagreeamoreeffectivebalancebetweenweedandpestmanagementandnativevege/environmentaloutcomesisneeded.
• ExportcertificationThereturntofullcostrecoveryhassubstantiallyincreasedthecoststotheexportindustries.Ultimatelyincreasingthechargespaidbyfarmers.TheGPAisdisappointedthereportdoesnotprovideanyrecommendations.
• Glutenfreelabeling
Alllabelingneedstoberiskbased,sciencebasedevidence,consistentlymeasurable,andabletobeappliedtoimportedproducts.
• ForeignOwnershipAtpresentthereisagrainindustryreviewbeingundertakentolookatthecompetitionlawswithinAustralia.GPAbelievesthisreviewwillprovidegreaterevidencetosupportpolicydevelopmentregardingforeignownership.Currentlythereareconcernswithinthegrainsindustry,relatingtotheinadequacyofcompetitionlaw,whichareimpactingthegeneralsupportforfurtherforeigninvestment.InparticularGPA,islookingattherequirementforagrainsindustryspecificregulatoryframeworktosupporttruetransparencywithinthegrainssupplychain.TheGPAalsobelievesthereneedstobeabroaderopendiscussionregardingforeigninvestmenttoreassureproducerstherearesystemsinplacetoensureforeignownershipandinvestmentcomeswithanexpectationofgoodAustraliancitizenship.Forexample;thatforeigninvestmentandownershipwillnotreducethelevelofgrainsresearchleviesandfundingforotherindustrygoodactionsthroughcomplicatedtaxstructures/taxavoidancemechanisms.Inconclusion,theGPAsupporttheCommission’sstatementsregardingtheoverallsupportforregulatoryprocessesbutagreewiththeconcernsraisedaboutthelackofconsistencyinregulationsettingprocessesandthemissedopportunityinparticulartoutiliseregulatoryimpactassessment(RIA)processesasananalyticaltooltosupportthequalityofregulationmaking.WesupporttheCommissionsstatementsoutliningtheirconcernsregardingtheneedforgreaterrigorintheoverallprocessesusedtodevelopandsetregulationregulatoryimpactassessmentprocesses.WesupporttheCommissionsconcernsaboutthemisuseofRIAprocessesandtheunwillingnessofjurisdictionstoactivelyusebestpracticeprinciplestooverseeregulation.WesupporttheCommissionsproposedapproachestomakingRIAmoreaccountable.ThepropositionthattheRIAprocessesshouldengagewithstakeholdersmoresystematicallytohelpensureregulatorycostsaremoreappropriatelyassessed,includingamoreappropriateweightingoftheopinionsofstakeholders.Thosewhowillbepayingtheregulatorycostsinparticularneedtobeengagedearlierandthroughouttheprocess.GPAwouldalsoarguethatwhilstbroadstakeholderconsultationisimportantandleadstobetterregulatoryoutcomes.WelookforwardtofurtherdiscussionswiththeProductivityCommissiontoensuretheworkundertakentoproducethereporttranslatesintoactions,whichproviderealbenefittoagriculture.