A COMMON theme exposed by the Productivity Commission’s detailed examination of agricultural regulation is that the farm sector faces a vast array of complex rules, imposed by all three levels of Australian government, at every stage of the supply chain, from land acquisition through to marketing.
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The National Farmers’ Federation’s inquiry submission said the agricultural sector’s future opportunities had been well documented through recent government initiatives like the National Food Plan, Agricultural Competitiveness White Paper and its own Blueprint for Australian Agriculture.
“Despite this, the sector is being limited in its efforts to seize these opportunities through a tangle of complex regulations which increase costs to industry and government and limit our competitiveness as individual businesses and a nation as a whole,” the NFF said.
Productivity Commissioner Paul Lindwall said that vast level of government oversight created a cumulative regulatory burden that must be reduced if farm businesses are to become more productive and competitive.
The Commission’s draft report said regulation must be better-informed by scientific evidence, with Mr Lindwall declaring that some existing rules aren’t supported by evidence, like bans on Genetically Modified crops in various State jurisdictions.
Mr Lindwall said the inquiry’s draft report didn’t provide a bottom line total figure on the number of different regulations faced by the farm sector.
But it did cite AgForce’s inquiry submission which said Queensland agriculture was affected by over 75 Acts and regulations covering 17,590 pages.
The report also said the Australian government was mainly involved in regulating national and interjurisdictional issues, including biosecurity and access to ag-vet chemicals, with the Department of Agriculture and Water Resources responsible for around 90 non-fisheries related Acts.
“This is a small proportion of the regulations affecting farm businesses - others include those from the environment, treasury, immigration, infrastructure and industry portfolios,” the report said.
“Most of the concerns about regulatory burdens were about regulations that are not specific to the agriculture sector.”
Mr Lindwall said it was important to note the number of regulations or pages of regulations wasn’t what mattered - but the effect of those individual rules on farmers and agriculture does matter.
“You can have one regulation that’s 100 pages but doesn’t really have much effect and then you could have some draconian regulation that’s only a few pages long,” he said.
“The key point is that there are regulations that affect farmers at all stages of their production.
“It is very complex and if you look at the list - chemical regulation, land use regulation, environmental regulation, biosecurity, water, labour markets, competition policy, foreign investment etc. - most small business don‘t face such a large array of regulations.”
Mr Lindwall said the Commission didn’t cite a bottom line figure on the potential cost savings, if all of the reforms were implemented.
“Ideally, the net benefits of reform options, including productivity and competitiveness effects, would be quantified - however, this was not possible based on available information (and) providing a number could be misleading,” he said.
“However, we consider that adopting the recommendations that we’ve put in place will have a substantial impact on farmers and the community in general.”
Mr Lindwall said many of the report’s recommendations would benefit farmers and the wider Australian community by reducing the overall regulatory burden, but the Commission hadn’t stated its priorities, per se.
“Some notable areas in need of reform are transport, including heavy vehicles and road access, Genetically Modified crop bans, native vegetation and biodiversity conservation, foreign investment and farm animal welfare,” he said.
“It (priority reforms) depends on which farm sector you’re talking about.
“Transport is a big one and coastal shipping rules.
“It’s much cheaper to send something from Melbourne to Shanghai or any other port, than it is to send it from Hobart to Melbourne.
“That’s an area where we think the regulation is very onerous and very expensive.”
But the PC report also pointed to positive examples of regulation that delivered farm benefits Mr Lindwall said, like biosecurity rules which had broad community support.
“Farmers and the community in general are adversely affected by pests, weeds, parasites and so forth that are protected by our biosecurity regulations,” he said.
“We also think property rights are important.”
The Productivity Commission hasn’t analysed the merits of any legislation that’s been driven by extremist groups, to serve a creeping regulatory agenda that aims to try and strangulate industries they oppose, like livestock production.
Mr Lindwall said that type of legislation was a political issue and not the Commission’s focus during its investigation.
“We look at regulations to see whether they make sense,” he said.
“The development of regulations through a political process is well outside the scope of Commission inquiries.
“It’s all very well to consider the stock of regulation but you also have to consider the flow of new regulation and it should be based on a robust, science based assessment of the costs and benefits, of that regulation.
“In GM crops, as well as in animal welfare, we think there is a role of government to inform the public with credible and science based evidence, on the risks and benefits.
“In the case of animal welfare, the government can help inform the public about the actual welfare implications of particular treatments and behaviours etc. so that there’s some real evidence in the public debate there rather than just relying on opinions of advocacy groups”
Mr Lindwall said the Commission believed a credible, independent and rigorous national body was needed to develop animal welfare standards.
He said that independent body could gather and develop the evidence-base needed to balance the costs and benefits of changing animal welfare standards and communicate them to the community.
“There is a lot of misinformation about animal welfare,” he said.
Mr Lindwall said some people believed certain animal handling practices were providing welfare improvements when they actually weren’t.
On land clearing and land management regulation, Mr Lindwall said some rules had been overly restrictive in terms of pastoral leases and farmers wanting to diversify into other activities, to improve their economic outcomes.
“In land clearing, we found that the environmental regulations are important but there’s been an over-focus on just the environment rather than economic and social prisms,” he said.
“As we always say in all of our Commission reports, there should be a balance between economic, social and environmental parts of an industry.
“We think the burden of native vegetation regulations imposed on farm businesses could be reduced while maintaining or even improving environmental outcomes.”
The report highlighted work health and safety and environmental regulations as areas where complexity was “a particular concern”.
It also said that in some areas, regulations could be clearer and regulators could do more to communicate regulatory requirements to farm businesses and their advisors.
“Complexity adds to compliance costs and a potentially higher incidence of inadvertent non-compliance by farm businesses,” it said.
“A number of farm businesses - especially small farm businesses -complained that they struggled to navigate their way through the complex web of rules.”