Agricultural Produce Commission Amendments

agricultural-produce-commission-amendments
WAFarmers represents 1150 farm businesses and has 4000 individual members across the Wheatbelt, Great Southern and South West of the state.

As an advocacy organisation, we support political parties with policies that clearly support our members’ interests. The Liberal Party has a proud tradition of members representing rural and regional seats both at a state and federal level and has a long list of past and present members of parliament who have been farmers and pastoralists.

It is therefore with some disappointment that we learn that the Liberal Party’s Rural and Regional Policy Committee put forward a motion at the recent state conference which called on:

the party to oppose amending the Agricultural Produce Commission (APC) Act 1988 to include broadacre.

This motion was put and passed.

In public comments following the conference, the party’s agricultural spokesperson Jim Chown MLC said in the Farm Weekly on 1 August 2019 that:

I wouldn’t entertain an amendment to the act to include broadacre farming because he believed no case has been presented to signify or establish that broadacre farmers would benefit from it. Another levy would be a nail in the coffin for the industry especially with the competition we are seeing from the Black Sea.

Jim Chown MLC

Taking such a position without consulting WAFarmers does not bode well for a constructive working relationship with the industry, particularly when the WAFarmers’ Grains, Livestock, and General Sections have all unanimously endorsed the APC amendments and industry has reinforced this with unanimous member and non-member support for the changes at industry town hall meetings in Geraldton, Wickepin and York.

For our members to come out with overwhelming support for a legislative change that removes a regulatory restriction and supports free choice is not surprising; for it to be so quickly dismissed by the Liberal Party without consultation and careful consideration is however, very surprising.

This amendment would simply level the playing field for broadacre agriculture and allow grains and livestock producers to join all the other sectors including bananas, avocados, wine, pome, stone fruit, vegetables, pork etc, to access a legislative instrument that has been strongly supported by those ag sectors that have had access to it for the past thirty years.

The current Act has a clause that directly impinges on the ability of broadacre farmers including rangeland goat breeders, black barley growers or hemp producers to establish a funding scheme to address an industry issue, be it biosecurity, research and development, or market support. It also stops farmers from easily funding economic and legal studies into government regulatory failures or bad policy.

The APC Act was put in place at a time when the state government started to wind its way out of industry support and move towards a self-funding approach to research and development and marketing. As a mechanism it has been highly successful and strongly supported by those sectors that have access to it – for instance the states wine industry recently leveraged their $700,000 into $3m from state and federal governments to support wine tourism. And the Carnarvon banana growers use it to self-insure against cyclone damage.

Unfortunately, when the original legislation was introduced by the ALP back in 1988, the Liberal and National parties used it as a way of scoring political points against the Labor Party by showing wheatbelt farmers and pastoralists that they did not support new compulsory levies.

Thirty years on and the industry has well established state and federal levies that cover everything from grains and livestock research to the control of wild dogs, footrot and skeleton weed. While they are endlessly debated by farmers, the industry on the whole sees the benefits of the existing levy’s and understand that there is much to be gained from all kicking in to support a common good. The question of the level of funding and priorities are, as they should be, always on the table.

However if the Liberal Party does not support state and federal agricultural levies it should put forward this as its policy position and argue its case. If it wants to review the merits of certain levies or amend state legislation to include an opt out clause, then it should put this up as part of its policy platform.

But to refuse to support the industry’s peak grower group position and to dismiss their argument in favor of what is not a levy but a fee for service is a clear signal that the party is not listening. We believe we have run a strong case in the rural media over the past six months for removing the unfair discrimination against the broadacre growers.

The case for the liberal party supporting the APC amendments is strong:

  • The Act has been in place since 1988 and has been used by every other sector of agriculture.
  • The Act is tried and tested and is seen as an effective and efficient means of industry self funding to address specific issues.
  • The exclusion of broadacre directly discriminates against farmers, pastoralists, dairy farmers and graziers
  • The APC is not a tax or a new levy: it is a fee for a specific service that industry wants to undertake.
  • As extra protection, broadacre has asked for an opt-out clause to be included to accommodate those who don’t want to contribute.
  • With government vacating the field of industry support for research development, biosecurity and market development industry needs a funding mechanism.
  • Growers are more likely to fund a grower good project when the funding structure is back by the state via an efficient end point collection scheme.
  • Across Australia the WA APC Act is seen as best practice and has been adopted by other states notably South Australia.

Unfortunately, the Pastoralists and Graziers Association (PGA) has come out against the APC amendments claiming that it is a new levy, that there are already too many levy’s and it is simply being promoted by WAFarmers as a self-funding mechanism.

To put some context into the debate, the PGA represents the southern WA pastoral industry while the Kimberley Pilbara Cattlemen’s Association represents pastoralists in the north of the state. It also represents around 150 wheatbelt growers; a clear minority of all farmers and far less than the WAfarmers’ membership.

WAFarmers is not seeking the amendments to put in place a funding mechanism for its own benefit and if it were, it would be open for PGA members to opt out (under the amendments we are supporting). To be clear we don’t need the funds, WAFarmers has a turnover of $1.2m and an affordable four staff, it has reserves in the bank, it is running at a surplus, the long term budget position is highly sustainable and we have the added advantage of not being reliant on large corporate mining magnates for financial support.

The PGA might find that if the APC amendments do get up their own members might see merit in supporting one or more of the following example projects:

  • an independent scientific review into the safe stocking density of live cattle and sheep on live export ships.
  • an economic review into the value for money of the existing national levies paid to MLA.
  • a review into the merits of moving the grains research section out of DPIRD into a grower-controlled entity backed with more funding by GRDC (Grains West Model)
  • Development of a detailed map of paddock level gaps across the regional mobile network, the best technical options to plug those gaps and the economic merits of supporting fast tracking of the roll out of 5G into the regions
  • the legal and economic merits of going to perpetual 99 year leases, freeholding the pastoral estate and improving freehold property rights.

Currently the very nature of the industry, with its four thousand plus small business broadacre producers means that it is difficult to get farmers and pastoralists to collectively support these sorts of costly projects. It’s far easier for growers to be a leaner rather than sign up to be a lifter. Just as the industry found when it came to raising funds for the live export debate, raising just 1c per sheep in the state. Growers will only contribute when they can be certain that the vast majority of others will also kick in, but the current system of passing the hat around does not work as growers sit back to see if others are contributing, which becomes a self-defeating circle.

What we know does work is the APC system. We know it works from both the other sectors in WA and the South Australia experience which was adopted from the WA APC model a decade ago. Their farmers will not opt out if they know that the burden is being fairly distributed across all growers and there is a simple collection system at the point of sale. Even with an opt-out option, 98% of SA growers still remain in the scheme which funds South Australian Primary Producers to run industry good projects on behalf of all growers.

In the modern world to build a political case requires a lot of money, resources the broadacre sector is failing to raise. Industry groups, be it the Chamber of Minerals and Energy or the Australian Hotels Association routinely use the services of academic specialists and professionals, employed through reputable consultancies such as Deloittes and KPMG to develop the economic, scientific, legal and environmental cases to push back on bad government policy or build the case for regulatory changes.

For example, we as an industry should be in a position to fund a report into the economic benefits to agriculture of the merits of Roe 8 and 9 and the benefits of reducing payroll tax on primary industry on regional employment. Just as we should be able to go after the government on the economic costs and safety issues for failing to invest in the country grain road network and the failure of the restructure of DPIRD to support the states biosecurity system.

At the moment neither PGA nor WAFarmers has the resources to undertake this sort of independent policy work which costs hundreds of thousands of dollars per project if it is to be done properly.

The arguments put up by the Liberal Party at the state conference and your agricultural spokesperson in last week’s rural media reflects a narrow view of a minority that are opposed to any form of compulsory levy. It does not reflect the views of the industry once they understand what the APC can do for them. And it continues an unfair discrimination, excluding broadacre growers from accessing a simple funding system that horticulture and viticulture have access to.

For instance growers would have under our proposed amendments, the chance to vote for or against supporting a 12 month long research project that calls for the allocation of 2c a tonne ($300,000) to fund an economic and safety review into the state of our country grain road network and 2c a tonne for a legal crack at the secret deal between the state government and the rail operator to open up the tier three rail network to new entrants. And should the projects get strong support from growers and be set up, those growers who are opposed could opt out if they feel such a review was a waste of money and/or unnecessary. This is classic liberal values of freedom of choice. Under the current system growers have no choice, and we have no way of easily raising the funds to undertake such projects.

For the Liberal Party to run the argument that they oppose the APC based on the fact that they now oppose compulsory levies is disingenuous. If the liberals truly did not support ag levy’s they should come out with a policy they abolishes the APC as it currently stands along with all other state and federal levies. Similarly, the view that it should be opt-in would need to be similarly prosecuted. Such a policy position would no doubt be strongly opposed by a large proportion of growers.

The Liberal Party in the bush has both political credit in the bank and a credibility deficit when it comes to how it is perceived by farmers. At a state level it has struggled to win regional seats and is likely to fail to regain the seat of Geraldton if it cannot show it is taking the views of what should be a core constituency seriously. It is unfortunate that the Liberal party gained a reputation during the last term of government of ignoring the interests of farmers as the Barnett government and a succession of Liberal Treasurers and Ag Ministers (second term) went about halving the size of the department of agriculture from 1550 to 900 staff and inflicting deep budget cuts on its research capacity.

But the Liberal Party is also remembered as the party that took the hard decision to remove the GM Restrictions Act (which the National party failed to do when they held the Ag portfolio) which is one of the most important legislative changes in the past thirty years. WAFarmers now seeks the support of the Liberal Party for another major legislative change – removal of the APC restrictions on broad acre plus the inclusion of an opt-out clause.

These changes would enable the industry to support political parties that put up pro-business policies like Roe 8 and 9 and the lifting of payroll tax thresholds. The industry wants to see pro-business, pro rural and regional policies that give all farmers a fair go. But they first need to show they are listening and have the ability to act on today’s issues before expecting to be taken seriously on tomorrow’s policies.

We see the APC as a clear test of the Liberal Party. Will it back the interests of farmers, or will it support a minority of ideologically driven individuals who would prefer to see farmers continued to be declined free choice. You and your members are welcome to attend any or our regional briefings to gauge industry support and we would welcome the opportunity to meet with you and to be given the opportunity to brief the party room on this very important amendment.

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