productivity commission review of regulation in agriculture · chemicals would have multifaceted...

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.