ABN: 25 107 507 559
ACN: 107 507 559
PO Box 138
Camberwell West VIC 3124
Level 2, 273 Camberwell Road
Camberwell VIC 3124
T (03) 9882 0277
F (03) 9882 6722
E [email protected]
www.ausveg.com.au
23 October 2014
Department of Agriculture
Agvet Chemicals Policy
Sustainability and Biosecurity Policy Division
GPO Box 858
CANBERRA ACT 2601
Submission to First Principles Review of Cost Recovery at the
Australian Pesticides & Veterinary Medicines Authority
1. About AUSVEG
AUSVEG is the National Peak Industry Body representing the interests of Australian vegetable and
potato growers. We represent growers around Australia and assist them by ensuring the National
Vegetable Levy and the National Potato Levy are invested in research and development (R&D) that
best meets the needs of the industry.
AUSVEG also makes representations on behalf of vegetable and potato growers to ensure their
interests and concerns are effectively communicated to all levels of government, in the public
sphere, and throughout relevant areas of the private sector.
2. Queries
For more information regarding this submission please contact AUSVEG Manager- Government and
Parliamentary Relations, Mr Andrew White, on (03) 9882 0277 or at [email protected].
Yours sincerely
Richard J Mulcahy
Chief Executive Officer
1
3. Preamble
AUSVEG welcomes the opportunity to provide a response to the final report completed by Protiviti
on behalf of the Department of Agriculture regarding the First Principles of Cost Recovery review of
the Australian Pesticides & Veterinary Medicines Authority.
AUSVEG has examined the final report and would like to request some clarification on the terms
used while providing feedback on other areas, primarily related to the funding of Minor Use permits.
4. Response to Minor Use Cost Recovery Recommendations
4.1) Minor Use Cost Recovery
Throughout the Cost Recovery review, the Department of Agriculture has received numerous
submissions outlining the overall impact and importance of the Minor Use program within Australia.
AUSVEG appreciates that the review has taken the across-horticulture industry submission regarding
Minor Use on board and that much of the feedback provided has been taken into account. The
awareness that Minor Use permits are not a private good and are intended to address market
failure, being issued where the applicant is a representative body for a group of users, acknowledges
how Minor Use permits are used. Furthermore, the recognition that a low cost will continue to
encourage users to obtain Minor Use permits to fill market failings demonstrates an understanding
of the importance of this program, particularly given the varied and dynamic nature of horticultural
production in different parts of Australia and the various pest and disease threats facing producers.
As is clear from the horticulture industry submission in February this year, it is important that Minor
Use permits remain funded at current levels as per the current system. AUSVEG supports the
recommendation in the review that Minor Use permits will remain subsidised and will not become
subject to full cost-recovery. We are pleased that the review has taken into consideration many of
the concerns of industry.
However, whilst there has been an acknowledgement that Minor Use permits will be primarily
funded by the annual flat levy paid for all registered products, the level of subsidisation is still
unclear. For example:
“The application fee should be set at a level that balances the ability for the
APVMA to recover a portion of the cost of assessment upfront while not acting as
a significant disincentive for users to seek a minor use permit for off-label use of
an agvet chemical.”
AUSVEG considers this statement to be ambiguous, providing little clear direction on future funding
levels. Specifically, the phrase “significant disincentive” provides very little information on the
possible range to which the costing may be modified, or what has been recommended for cost
recovery in the future. AUSVEG re-iterates its position that the fee structure for Minor Use permits
(i.e. $350 per application) must be maintained to ensure that thousands of growers around the
country continue to have access to the crop protection solutions they need. As outlined in the
previous across-horticulture submission, the relatively small size of the Australian market and the
high level of crop segmentation provide evidence of the need to maintain current costs structures.
2
4.2) Clarification of terms
The report repeatedly recognises the need for access to Minor Use permits, but it is unclear as to
what future level of subsidisation is recommended. Should these recommendations for cost
recovery proceed further, clarification will be needed.
The vegetable industry’s greatest concern is that the $350 cost for submitting a Minor Use permit
will increase, causing significant damage to the industry and inhibiting access to vital crop protection
solutions used to tackle destructive pests and diseases. As recognised in the review, Minor Use
permits are not a private good and are intended to address market failure, meaning that they assist
industry as a whole to remain competitive. AUSVEG believes it is imperative that the level of funding
for Minor Use permits remains at the current level, as any increase would create a significant
disincentive for potential applications.
Recommendations
1) As previously contended, given the quantum of fees proposed under a fully cost recovered
funding model for Minor Use permits, any increase in fees would be damaging to
horticultural productivity and impact negatively on the sustainability of Australian
horticulture. It is therefore argued that a consistent set fee, at the currently charged level,
should be maintained.
2) The consultant’s report to the Department of Agriculture should specifically highlight the
importance of maintaining Minor Use permit application fees at the current level to protect
access to vital horticultural crop protection solutions.
3