R,D&E Levy report handed down

On 30 June 2015, the Australian Senate Rural and Regional Affairs and Transport References Committee released its report
on the Australian agricultural levy system.

The report titled, “The industry structures and systems governing the imposition of and disbursement of marketing and research and development (R&D)
levies in the agriculture sector” endorsed the current model of Rural Research and Development Corporations (RDCs) as well as suggesting improvements
to current operating processes.

The Australian Dairy Industry Council (ADIC) submission into the inquiry advocated in support of the (RDCs) model and the opportunities for dairy farmers
provided by Dairy Australia (DA). Whilst the ADIC considers that the Levy Poll framework provides an important opportunity for DA to talk to levy payers
about their levy investment, it was also acknowledged that there is scope to improve the effectiveness and efficiency of the process.

The diversity across the various commodities subject to levies was recognised by the report, as was the need for each industry to determine their own method
of consultation and changes to the levy poll process.

Key points for dairy:

  • The report emphasizes that levy payers should be able to trace their levy payment to investment and return, and be able to have their say on investment
    of their levy.
  • The report notes that dairy currently undertakes a levy poll in order to change the levy rate, however it does not support such a poll for every industry,
    nor does it state that a levy is not an appropriate method.
  • The role of industry representative bodies, such as ADF, in the levy system is endorsed noting that peak industry groups play an essential role in
    providing opportunities for levy payers to influence investment decisions.
  • The report finds that the method of consultation is currently a burden on time, resources and industry and therefore should be streamlined.
  • The report emphasizes the importance of having a levy payer database as crucial for the system and engagement with levy payers.
  • The report does not conflict with where the DA levy poll review process is heading.

Overall the report has reaffirmed the importance of Australia’s Agricultural R&D levy system as crucial to the continued sustainable growth of the
Australian dairy industry. The report highlights that there are always improvements to be made which will provide farmers with greater returns on their
levy investments, while not recommending any substantial changes to the existing arrangement for dairy.

The Government will next formally consider the report and provide its response. For more information and to download a copy of the ADIC’s submission,
click here.

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