By Grain Producers Association Chair and a WA grain producer, Barry Large.
THE devil’s in the detail of the federal budget’s announcement of a new 10 per cent Biosecurity Protection Levy – some would call it a tax – that’s set to be imposed on Australian grain producers.
Federal Agriculture Minister, Murray Watt, has proposed raising $47.5 million per year across all producers from the added 10pc levy, as part of a ‘sustainable’ funding model for biosecurity protections.
However, these funds will be raised off producers and re-directed into general revenue, for the federal agriculture department, which also received a $127 million allocation in the budget (from consolidated revenue) to cover recent financial losses.
At the new rate of 1.122pc (1.02 + 0.102), the total levies collected from Australian grain producers, based on the $28 billion crop produced in 2022/23, would be $314.16m.
This is an added $28.56m from the 10pc levy, which represents more than 60pc of the $47.5m to be raised by the 10pc levy across all agricultural sectors.
However, we don’t know what the value proposition is for grains and if it will actually deliver better protections.
GRDC’s total revenue in 2021–22, including government contributions and other income, was $343.4m.
Pic: Barry Large.
Surely the first logical question that needs to be asked is whether we can do more on biosecurity preventions, using existing levy-funds and options, to protect the Australian grains industry?
Funding a government department directly from growers’ pockets is also at complete odds with the current levy-payer system whereby GPA works in partnership with our levy-recipient bodies, such as Plant Health Australia and the Grains Research and Development Corporation.
This system also provides oversight and transparency for levy-spending, with GPA representing growers’ interests.
This collaboration also provides grower input into targeted investments and projects, to deliver shared benefits; including greater taxation for the national economy from increased production.
GRDC’s investment in biosecurity has already averaged $35m per year over the last five years.
The Biosecurity Activity Levy that’s paid by Australian grain producers funds the Grains Farm Biosecurity Program and website ($970,000 average per year over last five years). And PHA membership that’s averaged about $420,000 per year over the last five years.
The Biosecurity Emergency Response Levy that’s already in place for grains is also used to fund the costs of emergency responses in relation to plant pests and diseases.
We don’t know if this new 10pc levy to be imposed on growers will in fact deliver stronger safeguards to protect against the potentially devastating impacts of tiny hitchhiker pests such as Khapra beetle.
Khapra would inflict a $15.5 billion hit on our industry and the national economy, shutting down major grain markets.
If Karnal bunt became established in Australia, our access to over 45 international markets would be restricted and grain prices would be significantly reduced.
Nobody will be collecting any levies anywhere if we get hit by Khapra beetle or Karnal bunt.
We can’t afford to pay another 10pc levy unless we know what the actual value proposition is and if it’ll actually strengthen protections against these devastating pests and other risks.
In addition, GPA and other plant industry groups have advocated for the introduction of a levy on imported sea containers so that ‘risk-creators’ make a fairer contribution to biosecurity protections.
Minister Watt says this container levy is “still on the table”, but international trade law issues need to be worked through. Meanwhile, after years of governments promising a fairer contribution from risk-creators, growers will pay more while the biosecurity risks keep getting bigger.
This container levy must be resolved first, before the government hits growers with another 10pc levy, given the importers are the ones creating these risks.
Another fact is growers already pay levies to cover the costs of eradicating these diseases, when the importers don’t, as well as the costs of pest and diseases management in our own farm businesses.
Ahead of the 1 July 2024 proposed deadline for this new levy to be introduced, the Department will run a consultation process to ensure implementation is “appropriate for industry”.
Whether the levy-rate is permanently set at 10pc in new regulations, or if it can be increased by a future government, or lowered, or if the regulations can be amended for other purposes, will be addressed in these consultations. And issues of transparency and oversight on spending for growers.
GPA will continue to focus on this critically important issue, ensuring our members’ views are at the forefront of any decision-making.
We’ve developed a Fact Sheet to help understand some of the details on this new 10pc levy HERE
We’re also conducting a short, sharp ‘Yes’ and ‘No’ survey to gauge growers’ thoughts and feelings on the government’s proposal. HERE
I urge everyone to contribute to this survey and get your response into GPA – and share it with your networks so their views are also known – before the deadline: 5pm on 8 June 2023.
* this article was first published in Farmonline national, on 2 June 2023 HERE
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