A Hive-based Levy for the Honeybee Industry

Transcription

1 A Hive-based Levy for the Honeybee Industry Scoping study assessing the suitability and feasibility of an alternative honeybee levy approach RIRDC Publication No. 10/143

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3 A Hive-based Levy for the Honeybee Industry Scoping study assessing the suitability and feasibility of an alternative honeybee levy approach by Robert G. Granger and Vicki L. Woodburn July 2010 RIRDC Publication No. 10/143 RIRDC Project No. PRJ

4 2010 Rural Industries Research and Development Corporation. All rights reserved. ISBN ISSN A Hive-based Levy for the Honeybee Industry Scoping study assessing the suitability and feasibility of an alternative honeybee levy approach Publication No. 10/143 Project No. PRJ The information contained in this publication is intended for general use to assist public knowledge and discussion and to help improve the development of sustainable regions. You must not rely on any information contained in this publication without taking specialist advice relevant to your particular circumstances. While reasonable care has been taken in preparing this publication to ensure that information is true and correct, the Commonwealth of Australia gives no assurance as to the accuracy of any information in this publication. The Commonwealth of Australia, the Rural Industries Research and Development Corporation (RIRDC), the authors or contributors expressly disclaim, to the maximum extent permitted by law, all responsibility and liability to any person, arising directly or indirectly from any act or omission, or for any consequences of any such act or omission, made in reliance on the contents of this publication, whether or not caused by any negligence on the part of the Commonwealth of Australia, RIRDC, the authors or contributors. The Commonwealth of Australia does not necessarily endorse the views in this publication. This publication is copyright. Apart from any use as permitted under the Copyright Act 1968, all other rights are reserved. However, wide dissemination is encouraged. Requests and inquiries concerning reproduction and rights should be addressed to the RIRDC Publications Manager on phone Researcher Contact Details Garland Outcomes Pty Ltd 7 Dianella Street O CONNOR ACT 2602 Phone: vicki.woodburn@garlandoutcomes.com.au In submitting this report, the researcher has agreed to RIRDC publishing this material in its edited form. RIRDC Contact Details Rural Industries Research and Development Corporation Level 2, 15 National Circuit BARTON ACT 2600 PO Box 4776 KINGSTON ACT 2604 Phone: Fax: rirdc@rirdc.gov.au. Web: Electronically published by RIRDC in July 2010 Print-on-demand by Union Offset Printing, Canberra at or phone ii

5 Foreword The honeybee industry currently enjoys the benefits of compulsory legislated levies for research and development, managing emergency animal disease threats and supporting residue testing services for honey. These levies help the honeybee industry to maintain and improve its productivity and profitability. The industry currently pays levies on sales of honey and queenbees. In the interest of continuous improvement, and trying to keep the honeybee industry as productive, profitable and sustainable as possible, the peak body for the industry, the Australian Honey Bee Industry Council, has proposed that an investigation occur into whether there would be benefits in replacing the existing levies with a unified hive-based levy paid by all beekeepers. This report, commissioned by the Rural Industries Research and Development Corporation (RIRDC), provides an information resource for the industry and beekeepers that outlines how a hive-based levy could work, how it might compare with the existing approach, and some of the steps that may need to be taken should this approach be pursued by the industry. The project identified that the bee hive can be used as the basis for a levy. Collection approaches and costs may pose significant challenges to the industry using the bee hive as the levy base; because there are limited consistent and common transactions based on the bee hive, a large number of individuals would be required to pay the levy independently. This analysis suggests that the hive-based levy would need to be greater than $2 per hive per annum to provide industry benefits. This report was funded from industry revenue, matched by funds by the Australian Government. The research component of the proposal was informed by an expansive consultation process with industry stakeholders whose comments and counsel were most appreciated. This report is an addition to RIRDC s diverse range of over 2000 research publications and it forms part of our Honeybee R&D program, which aims to improve the productivity and profitability of the Australian beekeeping industry through the organisation, funding and management of a research, development and extension program that is both stakeholder and market focused. Most of RIRDC s publications are available for viewing, free downloading or purchasing online at Purchases can also be made by phoning Tony Byrne Acting Managing Director Rural Industries Research and Development Corporation iii

6 Acknowledgments The authors (Robert Granger and Vicki Woodburn from Garland Outcomes Pty Ltd) would like to thank people from the honeybee industry and government representatives who were generous with their time and valuable perspectives and insights during this project. We would like to particularly acknowledge Des Cannon and David Dall from the Rural Industries Research and Development Corporation and Lindsay Bourke and Stephen Ware from the Australian Honey Bee Industry Council for their feedback and assistance during the project. Abbreviations ABARE AHA AHBIC AHC AQIS DAFF EADR EADRA FCAAA LRS NRS R&D RIRDC Australian Bureau of Agricultural and Resource Economics Animal Health Australia Australian Honeybee Industry Council Australian Horticulture Corporation Australian Quarantine Inspection Service Department of Agriculture, Fisheries and Forestry Emergency Animal Disease Response Levy Emergency Animal Disease Response Agreement Federal Council of Australian Apiarists Association Levies Revenue Service (a part of the Department of Agriculture, Fisheries and Forestry) National Residue Survey Research and Development Rural Industries Research and Development Corporation iv

7 Contents Foreword... iii Acknowledgments... iv Abbreviations... iv Contents... v Executive Summary... viii 1. Introduction Methodology What is being proposed? Snapshot of the Australian honeybee industry... 7 Value... 7 Structure... 7 Production... 9 Market Industry Representation Pest and Disease Risks Resource Use How does the existing honeybee industry levy system work? What are the current levies for the honeybee industry? What are the levies purpose and administration arrangements? Who pays and collects the levies? What legislation and regulations enacts the honeybee levies? How much is collected from levies? What are the existing state/territory government registration systems for beekeepers? What are previous levy arrangements that may be relevant? What is driving the proposal to change the honeybee levy approach? Resourcing AHBIC Management of Biosecurity Threats Equity of Levy Payers Key conclusions on issues driving proposed levy changes How could the hive-based levy approach work? Can the production input be used as the basis of a levy? How much could be collected using the hive-based levy approach? How much would collection cost? Who would pay the levy? What if an exemption were to apply? How much could an individual business pay? v

8 What is the willingness and legalities of State and Territory Governments to collect the levy? What are some other issues that need to be considered? Implications Summary of hive-based approach Addressing the drivers motivating industry to change levy arrangements How does the hive-based levy address the Australian Government Levy principles and Guidelines? Recommendations Appendix References vi

9 Tables Table 1 Snapshot of the hive-based levy proposal... 5 Table 2 Numbers of beekeepers and hives, by state, Table 3 Honey Levy Types and Distribution Table 4 Queenbee levy Table 5 Funding collected from honeybee industry levies Table 6 State and Territory registration requirements for the honeybee industry Table 7 AHBIC Member association consultation feedback Table 8 Other industry stakeholder s consultation feedback Table 9 Cost sharing of Emergency Animal Disease Response Table 10 Table 11 Funding that could be collected through a hive-based levy based on data on the number of hives Estimate of collection costs using beekeepers paying directly to Australian Government option Table 12 Indicative hive levy revenue and collection costs by State/Territory Table 13 Estimate of total collection and collection costs for a hive-based levy if an exemption were to apply Table 14 Indicative hive levy payments per business per annum based on ABARE survey data Table 15 Summary of assessment of hive-based levy for the honeybee industry Figures Figure 1 Distribution of beekeepers according to size of their operations Figure 2 Geographic distribution of Beekeepers Figure 3 Figure 4 Estimate of average honey produced per business according to size of operation using the number of hives operating in the business, Average number of queenbees sold per business according to size of operation using the number of hives operating in the business, Figure 5 Australian Honey Bee Industry Council Figure 6 Legislation and regulations for Honeybee industry levies vii

10 Executive Summary What the report is about This report presents the results of an investigation into the feasibility of a hive-based levy arrangement for the Australian honeybee industry. The honeybee industry has requested the study be undertaken to determine whether changing the levy arrangement from the point of sale of honey to its production input, the bee hive, would be of benefit to the industry. The report presents attributes of the Australian honeybee industry that would shape levy arrangements along with a descriptive analysis of how the existing honey levy system works. It identifies how a hive-based levy arrangement could work, including how much funding could be collected and collection approaches and costs. The report aims to be a resource for the industry to determine whether a hive-based levy approach might meet their current and future needs. An extensive consultation process involving representatives from the industry and government was undertaken to inform the project s analysis of how the proposed hive levy system could work. The report details how a hive levy addresses the Australian Government s Levy Principles and Guidelines. Who is the report targeted at? The primary audience for this report is the Australian Honey Bee Industry Council (AHBIC) and member organisations. The report could also be used to inform commercial and non-commercial beekeepers, other beekeeper-related associations and government policy makers. Background The Australian honeybee industry has a forecast gross value of honey and beeswax production of $90 million in The industry also provides paid pollination services, queenbees and packaged bees for domestic and export sales, and pollen. While the honeybee industry is a relatively small industry, its value to the rest of agriculture and the economy through pollination services far exceeds its value based on gross value of honey and beeswax estimates alone. The honeybee industry currently pays a statutory levy of 2.3 cents per kilogram of honey. The levy is divided between three purpose areas research and development (R&D), Emergency Animal Disease Response and National Residue Survey. The levies are paid on domestic and export sales of honey and are collected at the point of sale of honey and queenbees. The AHBIC has proposed that an investigation occur into the merits and costs of changing the levy payment from the production output, which is the point of sale of honey, to the production input, the bee hive. It is proposed that the current honey and queenbee levies be replaced by a unified hive-based levy. It is proposed to apply a new levy to all beekeepers in Australia, both commercial and non-commercial, for each managed beehive. Aims/objectives The primary aim of this project is to provide an independent review of the AHBIC proposal to amend the levy arrangements for the honeybee industry, and assess how the hive-based approach could work and what may need to occur if the industry chose to pursue this path. viii

11 Methods used The project has investigated the feasibility and possible positive and negative consequences of changing the honeybee levy from collection at the point of sale of honey to collection from the primary input, the bee hive, and has: compiled information on the characteristics and attributes of the industry that would shape an appropriate levy approach for the industry analysed how the existing honeybee industry levy system works identified the motivations and desires of the honeybee industry that have resulted in the proposal documented how the proposed hive-based levy system could work and identified any opportunities or barriers to this system compared the two levy collection systems and identified their respective advantages and disadvantages identified how the proposed levy approach addresses the Australian Government s Levy Principles and Guidelines that would need to be met should the industry seek to progress with amending the levy, or what might need to occur to meet the Levy Principles and Guidelines, and developed independent recommendations and possible future steps the industry could take to improve its positioning in relation to its levy. Consultation has occurred with over 35 industry stakeholders including associations, businesses and the non-commercial sector. Consultation also occurred with seven state and territory government officials and the Australian Government. Results/key findings Industry reported three drivers motivating their interest to investigate a hive-based levy approach. Firstly, and most consistently presented during consultations, was the desire to obtain resourcing and funding security for the industry peak body, AHBIC. Under the existing guidelines, the Australian Government would not entertain setting up a compulsory levy to resource an industry peak body regardless of the levy approach that was used. The project found that alternative pathways to resource the peak body should be investigated by the industry. AHBIC reported that they are aware that this is not a pathway for their own resourcing. Secondly was a requirement to increase resources for managing on-going preventative biosecurity actions and responses to biosecurity occurrences. The need for more funding for biosecurity seems a plausible requirement, however no information was provided on how much additional funding was needed by the industry, what the money would be used for and who would undertake the biosecurity services. The project provides information for the industry on the amount of funding a hive-based approach could generate, costs associated with collection and how much individual beekeepers would be expected to pay. The industry should use this information to determine the appropriate hive levy cost that would enable them to resource their biosecurity requirements. Both levy approaches, i.e., the current and the hive-based levy, have the potential to generate greater funding than is currently being collected. Thirdly was the concern from the industry that the current system has free riders. It was thought that a hive-based approach may improve fairness and equity of the people required to pay levies so as to align collection with all those that are likely to benefit from services the levies resource. ix

12 A key point of difference between the two levy approaches is that funding can be generated from a wider base using the proposed hive-based approach. A hive-based levy offers prospects for a uniform basis for levy production and has the potential to meet the industry goal for a fairer levy where all beekeepers contribute to services that benefit both the commercial and non-commercial sectors. A hive levy could provide greater funding for R&D, residue testing and biosecurity programs if the industry were to consider a hive levy of greater than $2 per hive per annum. At this rate, existing levy payers would pay 150% of what they currently pay, and there would be additional levy payers who currently do not pay the levy who would also be required to contribute. Collection and compliance costs would be significant for a hive-based levy approach. This may result in the industry needing to consider an exemption for small non-commercial beekeepers paying the hive levy. Collection costs are likely to require the industry to consider trade-offs in relation to its goal of a universally fairer system and the possibility that an exemption level may need to be applied to allow the proposed levy approach to be a viable path for industry. Industry consultation strongly supported the concept that the states and territory governments should collect the hive levy from beekeepers as a marginal extension of the existing compulsory registration systems in place, and pass those funds on to the Australian Government. However, a number of critical factors make this option unviable; these include legal and constitutional constraints and cost of collection and compliance issues at the state, territory and Commonwealth levels. Implications for relevant stakeholders Should the Australian honeybee industry consider implementing a hive levy, there are a number of critical issues to consider: a hive levy would need to be at least $2 per hive per annum, but probably to make it worth the industry s while when factoring in the set-up costs, a minimum of $3 per hive per annum should be considered to be of benefit to the industry before proceeding with a fully developed campaign for introduction of a new hive levy, industry should undertake preliminary enquiries as to whether $3 per hive is likely to be supported by the majority of the industry. The issue of driving need for a changed levy basis lies at the central core of any levy change proposal, and in this regard the need for more funding for biosecurity activities and services presents a major and compelling reason for a new levy. Currently there is a lack of detailed information on how much additional funding would be needed, what the money would be used for and who would undertake the services. If any changes to levy arrangements were to be pursued with the Australian Government on this basis, a detailed plan of action for preventative and responsive biosecurity would be mandatory. A hive-based approach provides opportunity for wider contributions, and without any exemptions industry s goal of fairness and equity could be met. However, there is a lack of detailed information on just how benefits currently accrue to the 85% of beekeepers who are considered non-commercial, the majority of whom do not pay the current levy. A key challenge for the industry is how the hive levy would be collected and whether it would be costeffective. A state and territory government-based collection system does not appear feasible, resulting in a hive levy based on direct payments on all hives being paid directly to the Australian Government. This would impose significant collection costs for industry and would require a substantive increase in the industry suggested $1 per hive to raise increased net collections. Closely aligned to the issue of cost of collection is the question of exemptions from levy payment. Industry has suggested a hard line of no exemptions on the basis of the fairness and equity of those x

13 that may benefit from the intended purpose of the levies, but the realities of economics and industry support will require reconsideration of this aspect if a hive-levy approach is to be successfully pursued. If the proposal for a new hive levy at the suggested rate of $3 per hive attracts initial support, industry s next step should be to undertake a significant communication and consultation process with beekeepers to promote the purpose and benefits of a new levy and ensure support for the new levy approach prior to an industry ballot. An industry ballot for the change will be required after an extensive consultation process, and in terms of the Australian Government s Levy Principles and Guidelines this will not only be expensive but one of the most challenging aspects of the proposed change. In the final analysis, and even where an industry prepares an irrefutable case for change, the industry and general political dynamic accompanying any levy change proposal cannot be underestimated as the principal determinant of a successful outcome. Recommendations Following completion of desktop analysis and consultation with industry the following recommendations are provided: There is potential to increase funding for biosecurity for the industry using either the existing levy approach on sales of honey or through a hive-based levy. Should an increase in funding be pursued, it is recommended that the industry develop a clear plan for biosecurity which includes tasks, costs and how the industry would benefit from these actions. This plan would provide a guide to the level of additional resources required. The hive levy has the potential to widen the base of people contributing to the levy, which could help the industry deal with the fairness claims or perceptions. The challenge for the hive-based levy is identifying an efficient collection approach as the costs are high due to the number of transactions that would be required: Collection arrangements for the hive-based levy are problematic. Collection through state and territory government registration processes may seem practical at first glance, but it is unlikely to be supported by those governments due to legal and Constitutional constraints. It is recommended that if the industry seeks to pursue a hive-based levy it consider beekeepers paying directly to the Australian Government. It is recommended that a small study occur into understanding the non-commercial beekeeping sector. If the industry is to pursue the hive-based levy pathway then understanding their needs and wants and the way they operate will position the industry to service them into the future. A study that complements the ABARE survey targeting the non-commercial sector would be useful. It should seek to try to identify the volume of honey being sold through farmers markets and any likely future trends in this area. It could then inform where an exemption level might apply without impacting on fairness issues. This study could help the industry to demonstrate to the Australian Government that the current system needs to be improved, and would be valuable to any proposal for changing the levy approach. A hive-based levy approach has the potential to provide the industry with benefits through funds being obtained from a wider base. It is recommended that the hive levy should be at least $2 per hive, but probably to make it worth the industry s while when factoring in the set-up costs, a minimum of $3 per hive should be considered. It is recommended that the industry undertake preliminary enquiries as to whether $3 per hive is likely to be supported by the majority of the industry. xi

14 If $3 per hive seems to be supported, it is recommended that the industry undertake significant communication and consultation with beekeepers, both commercial and non-commercial, to promote the purpose and benefits of the levy and to gauge how much individual beekeepers would be willing to pay. Following this consultation, a ballot would need to be held to document the support of the industry for the changed levy approach. xii

15 1. Introduction Compulsory levies, enabled through Commonwealth legislation, can provide an effective system for businesses within an industry to work together, pool their resources and find solutions for priority industry issues. They can support research and development (R&D), promotion and marketing, residue testing, and plant and animal health programs for primary industries. The levies approach aims to help primary industries to maintain and improve their position in the highly competitive global market. The honeybee industry currently enjoys the benefits of levies for R&D, management of emergency animal disease threats and support of residue testing services for honey. For the Australian honeybee industry, levies are collected at the point of sale of honey and queenbees. The Australian Honey Bee Industry Council (AHBIC) has proposed that an investigation occur into the merits and costs of changing levy payment from the production output, which is the point of sale of honey, to their production input, the bee hive. This project carries out an investigation into the existing and proposed levy arrangements for the honeybee industry. The investigation has involved examining available data and information on the industry, consulting representatives from the industry on their views and perspectives in relation to the levy arrangements, and consulting government representatives on the implications of the proposed changes to the levy arrangements. Objectives The primary aim of this project is to provide an independent review of the AHBIC proposal to amend the levy arrangements for the honeybee industry. The project examines: whether the proposal as advanced could meet the Australian Government requirements for levy establishment and introduction, and if not, how it might be amended in order to meet those requirements, and the potential benefits and costs and requirements for preparation of a formal submission to the Australian Government should the proposal be pursued. 1

16 2. Methodology The approach used here to investigate the feasibility and possible positive and negative consequences of changing the honeybee levy from collection at the point of sale of honey to collection from the primary input, the bee hive, has involved: compiling information on the characteristics and attributes of the industry that would shape an appropriate levy approach for the industry analysing how the existing honeybee industry levy system works identifying the motivations and desires of the honeybee industry that have resulted in the proposal documenting how the proposed hive-based levy system could work and identifying any opportunities or barriers to this system comparing the two levy collection systems and identifying their respective advantages and disadvantages identifying how the proposed levy approach addresses the Australian Government s Levy Principles and Guidelines that would need to be met should the industry seek to progress with amending the levy, or what might need to occur to meet the Levy Principles and Guidelines, and developing independent recommendations and possible future steps the industry could take to improve its positioning in relation to its levy. The above analysis has been accomplished by reviewing existing data and information on the honeybee industry and other relevant primary industries, and considering relevant information from the Australian Government and state and territory governments. Consultation has occurred with over 35 industry stakeholders including from industry associations, beekeeping businesses and from the non-commercial beekeeping sector. Consultation also occurred with seven state and territory government officials (see Appendi for consultation list) and three Australian Government officials. The Australian Government Levy Principles and Guidelines set out factors an industry must address for any new levies and for amendments to existing levies (DAFF, 2007). The following questions would need to be addressed by the honeybee industry should it want to pursue changing its levy arrangements: is there a significant market failure in the industry to warrant a change to the existing levies structure? does the proposed levy have majority support from potential levy payers? has there been a reasonable attempt to inform all potential levy payers of the proposal and allow them to comment? has the initiator of the levy proposal provided an analysis of any arguments opposing a levy? is there an estimate of how much levy would be raised, a clear plan of how it would be utilised and the way(s) it would benefit levy payers? is there majority support on the levy imposition and collection mechanism, or demonstration that the mechanism is equitable? 2

17 is the levy imposition equitable between levy payers? is the levy imposition related to the inputs, outputs or value of production of the industry? is the levy collection system efficient and practical, and does it impose minimal red tape for business? has the body to manage levy monies been consulted and is that body accountable to levy payers and Government? does the industry have a plan to review the levy against the Levy Principles and Guidelines? 3

18 3. What is being proposed? AHBIC has proposed that the current honey and queenbee levies be replaced by a unified hive-based levy. It is proposed to apply this new levy to all bee-keepers in Australia, both commercial and noncommercial, for each managed beehive. A set amount per hive would apply. The amount suggested by AHBIC and other industry representatives during consultations was $1 per hive. It should be noted that this amount was suggested assuming the application of a hive levy on all hives (commercial and non-commercial) with no exemptions. The physical collection of the levy was consistently suggested in the consultation process to occur through existing state beekeeper registration systems. This would mean that the states and territory governments would be asked to collect the levy as part of their existing compulsory registration systems. It was acknowledged by the industry that not all states and territories have compulsory registration systems in place, and that alternative processes for these states and territories would need to be identified. The consultations with industry identified that the industry is not proposing to change the purpose or distribution of the collected levy between the three existing purposes R&D, emergency animal disease response and national residue survey. Therefore, the levies would continue to be distributed at 65.2% for R&D, 30.4% to Emergency Animal Disease Response and 4.3% to National Residue Survey 1. The management and administration arrangements for each of these purposes are also not being proposed to be changed. A summary of the proposed arrangements, compared to those that currently exist, is presented in Table 1. 1 This is based on the recent distribution changes between the Emergency Animal Disease Response Levy and the National Residue Survey Levy approved by the Australian Government. 4

19 Table 1 Snapshot of the hive-based levy proposal Questions What is the main thrust of the changes being proposed? What is the purpose for the levy? Who would pay the levy? Who submits the levy funding? Who collects the levy? Existing Honey Industry Levy Arrangements Not applicable Three purposes for the current levy - R&D, Emergency Animal Disease Management and National Residue Survey The producer, or the person who owned the honey immediately before sale, or the person who uses the honey in the production of other goods, is liable to pay the levy. Producers who sell less than 50 kilograms per month to an intermediate party or less than 600 kilograms annually are exempt from paying the levy. The intermediary (buying/selling agent, processor or shopkeeper) is responsible for lodging a quarterly return on behalf of the producer; or Where the producer sells the honey directly via markets or roadside stalls it is the producer s responsibility to pay the levy via an annual return. The levy is paid to the LRS which is part of the Australian Government s Department of Agriculture, Fisheries and Forestry (DAFF). The LRS charge a cost recovery for collection. The LRS distribute industrycollected funds to the relevant party for administering. For the R&D funds LRS will also provide the Australian Government matched funds for R&D. For the honeybee industry, administration of levy funds is by the Rural Industries Research and Development Corporation (RIRDC) for the R&D levy, Animal Health Australia (AHA) for the Emergency Animal Disease Response (EADR) Levy, and DAFF for the National Residue Service (NRS). Hive-based Levy Proposal Move the collection point of levies from the sale of the production output of honey and queenbees to the production input, the beehive. No change to the existing levy purpose has been proposed. The current distribution levels between the three levy purposes would apply. All beekeepers to pay the levy including commercial and non-commercial. There is an intention that all beekeepers make a contribution and that no exemption level should apply. Options for cost-effective collection need to be explored and compared with existing approach. The industry has proposed that the state and territory governments collect the levy, on behalf of the industry, as part of their beekeeper registration processes and submit the levy to Levies Revenue Service (LRS). This approach has been suggested by industry as it does not involve an additional transaction for beekeepers as they are already undertaking this registration activity. However, it is noted that Tasmania and the Australian Capital Territory do not have a compulsory registration approach. No change is being proposed. LRS would still have a primary role in the final collection and distribution of levy funds to the relevant administrative parties. If state and territory governments were to collect, collate and submit the levy to LRS, it is suggested the number of transactions LRS would receive would be significantly less than is currently the case. Industry suggested that the costs of management from LRS should be significantly reduced in the proposed levy arrangements. If the state and territory governments were to agree to collect and disperse the levy, a service charge would be imposed that would need to be factored into any costing of collections. 5

20 Questions What legislation would need to change? Existing Honey Industry Levy Arrangements Not applicable Hive-based Levy Proposal The legislation would need to change for both the basis of imposition of the levy and the collection of the levy. The final disbursement of the levies under the proposal is not expected to change. If the proposed approach of state and territory governments collecting the levy is to occur then it is likely that each state and territory would have independent legislation or legal requirements that would be need to be implemented to enable this to occur. 6

21 4. Snapshot of the Australian honeybee industry The characteristics and attributes of the honeybee industry that are relevant to the proposed changes to the industry s existing levy arrangements include: the financial performance of the average honeybee business and the value of the sector as a whole; the size and structure of the industry, which reflects the number of people involved in the industry, the scale of their businesses and the geographic distribution of the businesses; the volume of honey produced per year; the market for honey and how it is sold; the industry organisations and representative structures; the way the industry uses, and its level of impact on, natural resources, and vulnerability to pest and disease risks. Value The Australian Bureau of Agricultural and Resource Economics (ABARE) (2010) calculate that gross value of honey and beeswax production was $86 million during and was forecast to rise to $90 million during The industry also provides paid pollination services, queenbees and packaged bees for domestic and export sales, and pollen. Australian beekeepers received an estimated average revenue of $ for the financial year, of which it was estimated that an average of $ (76%) was for honey sales (ABARE, 2008). While the honeybee industry is a relatively small industry, its value to the rest of Australian agriculture and the national economy through pollination services and, potentially, the value of honey and honey products in medicinal uses, far exceeds the value based on gross value of production estimates alone (Centre for International Economics, 2005). Structure State apiarists estimated that the honeybee industry was made up of around registered beekeepers in who operated a total of hives (ABARE, 2008). There is compulsory registration of beekeepers in New South Wales, Queensland, South Australia, Victoria, Western Australia and the Northern Territory 2. Tasmania has a voluntary registration system and the Australian Capital Territory does not have beekeeper registration. There are a large number of registered beekeepers who own less than 50 hives (as illustrated in Figure 1). Only 17% of registered beekeepers have more than 50 hives, but they reportedly account for more than 90 per cent of Australia s total honey production and production of honeybee-related products and services (ABARE, 2008). 2 It should be noted that the Northern Territory began compulsory registration as of 1 September The data in the ABARE report from state apiarists was collected prior to this compulsory registration system. 7

22 Figure 1 Distribution of beekeepers according to size of their operations Number of beekeepers Less than 50 Hives Hives Hives 500 to 1000 > More than > 1000 Hives Hives Source: ABARE 2008 Table 2 shows the geographic distribution of registered hives. It highlights that New South Wales dominates the number of registered hives with 41%. Queensland, Victoria and South Australia have 22%, 17% and 12% of registered hives, respectively, whilst Western Australia and Tasmania have the fewest number of hives having 5% and 2% respectively (ABARE, 2008). Table 2 and Figure 2 also show that the number of beekeepers per state has New South Wales and Queensland each with 31% of Australia s beekeepers, and Victoria with the third largest number of beekeepers with 22%. Numbers of commercial and semi-commercial beekeepers in the Northern Territory (NT) are reported to currently to be about 15 in total, with approximately 2500 hives (Fitzpatrick, 2009). More accurate records for the NT are likely after compulsory registration is established on 1 September Table 2 Numbers of beekeepers and hives, by state, State/Territory Number of Beekeepers % of Beekeepers Number of hives % hives % operating 50 hives New South Wales % % 22% Queensland % % 12% Western Australia 712 7% % 13% South Australia 724 7% % 27% Tasmania* 157 2% % 20% Victoria % % 16% Northern Territory* 7 0% % na TOTAL % % 17% Source: ABARE 2008 from state apiary offices. na: not available. * Registration was not compulsory in these jurisdictions and as such the number of beekeepers is likely to be higher. 8

23 Figure 2 Geographic distribution of Beekeepers TAS 2% VIC 22% NSW 31% SA 7% WA 7% QLD 31% Source: ABARE 2008 State apiary offices Most honeybee operations are small, family owned and operated businesses managing fewer than 500 hives and depend on income sources other than beekeeping (ABARE, 2008). Production ABARE estimated that tonnes of honey was produced in The Centre for International Economics (2005) estimated that Australia s annual production of honey was between and tonnes per annum, driven mostly by weather conditions and the impact of weather events, such as bushfires and droughts, on the bee populations. Other factors that can impact the level of production are incidence of bee diseases, nutritional deficiencies in the bee population and the health and condition of the flora from which the honey is produced. Businesses operating in excess of 500 hives produced 60% of the honey sold in The ABARE Australian Honeybee Industry Survey (2008) estimated that the average volume of honey produced per hive nationally was 51 kilograms. Figure 3 shows the average total honey produced for businesses operating different hive numbers and the average kilograms per hive for these businesses. From this, it is noted that average production per hive tends to increase as more hives are operated by the business, although it appears to level off above 500 hives. The estimate for average kilogram per hive production is for businesses with over 50 hives, which for the ABARE survey was considered to represent commercial beekeepers. Therefore, caution must be taken when considering the data for non-commercial beekeepers that are operating less than 50 hives. 9

24 Figure 3 Estimate of average honey produced per business according to size of operation using the number of hives operating in the business, Average total kilograms of honey produced in Average kilograms per hive in kg/hive 102,717 42kg/hive 5,386 58kg/hive 19,389 68kg/hive 43, hives > hives > hives More than 1000 hives Size of Operation Source: ABARE This is based on ABARE data of total honey produced and average number of hives operated by the business for In , there was an average of 551 queenbees sold (ABARE, 2008). Figure 4 shows the average number of queenbees sold according to size of operation. Figure 4 Average number of queenbees sold per business according to size of operation using the number of hives operating in the business, Average number of queenbees sold hives > hives > hives More than 1000 hives Size of Operation Source: ABARE

25 Market The honeybee industry market can be characterised broadly into domestic and international sectors. The Centre for International Economics in the Future Directions for the Honeybee Industry report further classified the market into retail and industrial, and within these sectors into sub-categories such as food or medicinal/therapeutic (Centre for International Economics, 2005). It is estimated that 25-30% of the annual production of honey is exported (ABARE, 2008). The international market is reported by some during consultations for this project to be a potentially growing opportunity for the industry as world production of honey has decreased, in part due to disease outbreaks in other honey producing countries. Australian honey is highly regarded on the world market as a premium quality product (Benecke, 2007). Domestically, the consumer market is serviced by four primary packers and marketers (Capilano, Beechworth, Leabrooks and Wescobee), a large number of small honey producers selling direct to the public, and generic brands sold by the major retailers Coles and Woolworths (Centre for International Economics, 2005). Accurate volumes and values of honey sold direct to the public through farmers markets and other local distribution sites are not known, however many industry stakeholders suggested that increased direct sales of honey have been evident in recent years in response to cost and market pricing pressures. Industry Representation The Australian Honey Bee Industry Council (AHBIC) is the peak industry body with a mission: "To maximise the efficient use of industry resources and funds to ensure the long term economic viability, security and prosperity of the Australian honeybee industry in Australia" Its role and responsibilities as presented in the AHBIC Constitution cover a range of aims and activities: To foster, promote, enhance and protect the interests of the Australian Honey Bee Industry and the viability of its members To represent industry policy at all levels of government, private enterprise and the public To promote, support, seek amendments to, or oppose any legislation or measure that may affect the industry To assist and/or cooperate with any organisation, body, association, person or persons in the best interests of AHBIC To enhance the industry by encouraging the adoption of best practice in production, quality assurance, presentation and promotion of its products To conduct educational, promotional and public relations campaigns in the best interests of the industry and AHBIC where appropriate To gather and distribute to members, industry intelligence from local and international sources, and to function as a channel for information exchange within Australia and between Australia and other countries, leading to better understanding To enhance the development of all industry sectors through education and extension to interdependent industries within the public and agricultural communities 11

26 To act in any way not defined in these objects considered advisable in the best interests of the industry To be accountable to the members of AHBIC. AHBIC is currently made up of four national associations each representing the major sectors of the industry producers, queenbee producers, pollinators and packers and marketers (Figure 5). At the time of drafting of this report, AHBIC was proposing a number of constitutional amendments to give effect to restructuring reforms resulting from a recent internal AHBIC review. Figure 5 Australian Honey Bee Industry Council Australian Honey Bee Industry Council Inc Comprises four national associations, each representing a section of the honey industry in Australia Federal Council of Australian Apiarists' Association Comprises 6 state apiarist associations representing QLD, NSW, VIC,TAS,SA and WA. Most state associations have affiliated/branch associations which mainly represent the interests of commercial beekeepers but often, have non commercial membership. Australian Queen Bee Breeders' Association National Council of Pollination Associations There are 3 pollination associations listed in WA, VIC and TAS Honey Packers and Marketers' Association Inc Non commercial sector comprises many amateur /non-commercial beekeeper associations in most states some with affiliated membership to state apiarist associations. Resourcing any organisation within a diverse and complex industry structure is commonly a challenging issue. From our consultations, it appeared that the hobbyist/non-commercial bodies operating within the honeybee industry largely depend on the goodwill of many community-based beekeepers, and operate with minimal funding input to support their activities. Many of the hobbyist organisations affiliate with state representative associations. Moving along the value chain the same situation mostly exists for state and regional bodies that are fully funded by voluntary subscriptions, and rely on commitment by beekeepers for association leadership, drive and outputs. AHBIC s principal funding source over a number of years has been a voluntary levy arrangement, based at 0.5 of a cent (i.e. one half cent) per kilogram of honey packed and marketed through the major packers and marketers, who acted as collection agents. In a discussion paper (Briggs, 2008) published in Australia s Honeybee News, Linton Briggs, Executive Member of the Victorian Apiarists Association Inc, pointed out that the industry s voluntary levy compliance rate until had been assessed at 90% of eligible potential revenue, which was, by any standard, very high. This high compliance rate was the result of a concerted effort 12

27 to foster goodwill between packers and marketers and peak state bodies for the collection of the levy. Since that time, a combination of factors canvassed in the paper has reportedly seen a substantial erosion of AHBIC s funding base (Briggs, 2008). It is noted here that the paper does not represent an industry-endorsed policy publication. It is beyond the terms of reference of this report to analyse any impact these factors may have had on the desirability of a new hive levy, however it must be stated that funding of AHBIC featured consistently in our consultations with the major industry representative organisations. Pest and Disease Risks While most of the serious pests and diseases that affect honeybees globally are present in Australia, there remains a real threat of pest and disease incursion which could have a devastating impact not only on the honeybee industry but also honeybee pollination-dependent industries. While industry faces many beehive management measures through state and territory regulatory requirements and increased costs of production to control endemic pests and diseases, the potential threat of incursion of pests and diseases remains one of the honeybee industry s highest concerns. Any incursion of the mite Varroa destructor (Varroa) would have potential to cause serious industry damage if left unchecked. Consultation feedback with major state and territory representative bodies in this project repeatedly raised the threat of Varroa as a major issue which, if or when it occurred, would destroy feral honeybee colonies with consequent serious implications for pollination in many horticultural and agricultural industries. Many industry stakeholders felt that for managed hives, the resultant adjustment would be more measured, with producers suffering increased production costs as control measures were put in place. For non-commercial colonies, there was expected to be a substantial reduction in numbers of both hives and beekeepers. Many industry stakeholders felt that Australia would mirror the New Zealand experience if or when Varroa entered Australia. In its submission to the Inquiry into the Future Development of the Honeybee Industry by the House of Representatives Standing Committee on Primary Industries and Resources in 2008, the CSIRO identified the Asian bee mite, Tropilaelaps clareae (Tropilaelaps), as the second most important threat to the viability of the Australian honeybee industry. Government agencies already have in place a complex and diverse set of quarantine and risk management activities, including the critical National Sentinel Hive Program (NSHP). The NSHP was established in 2000, through consultation between Biosecurity Australia, state departments of primary industries and the honeybee industry, to enhance early detection of incursions of Varroa, Tropilaelaps, tracheal mite and the Asian honeybee. The program operates by locating sentinel hives in the vicinity of identified high risk sea ports. Resourcing detection and preventative measures for biosecurity threats is a high priority for the industry. Resource Use The way an industry uses its natural resources is extremely important, and can have a large bearing on its continuing success. The intensity of resource use and the level of impact or damage on the natural resource base by an industry have implications on the future viability and sustainability of an industry (Centre for International Economics, 2005). Honey production in Australia is migratory, with many hives being moved up to 20 times in a given year. This is due to the high variability of budding, flowering, and pollen and nectar yields associated with most plants accessed by apiarists. Therefore, most beekeepers search for the most suitable areas in order to maximise production (Centre for International Economics, 2005). 13

28 Access to native floral resources is important to the honeybee industry as the honey produced from these species is highly valued in the domestic and international market (RIRDC, 2007). This reliance on native flora exposes the industry to risks associated with changing land management policies at both state and territory and national levels. As a result, the industry needs to be able to demonstrate its environmental credentials and continuously improve any negative impacts the industry may have on the natural resource base. 14

29 5. How does the existing honeybee industry levy system work? A system of primary industry levies and charges can be applied under Commonwealth legislation to help businesses work together, pool their effort and resources and find solutions to priority industry issues. Legislated levies have been used to support R&D, promotion and marketing, residue testing, and plant and animal health programs. This section documents the existing levies for the honeybee industry by addressing the following questions: what are the current levies for the honeybee industry? who collects the levies? what legislation enacts the honeybee levies? what is the purpose of the levies? how are the levies administered? how much is collected from the levies? what are the existing state and territory registration arrangements? what are previous levy arrangements that may be relevant? What are the current levies for the honeybee industry? The Australian honeybee industry currently pays a total of 2.3 cents per kilogram of honey which comprises three levies - R&D, Emergency Animal Disease Response and National Residue Survey (Table 3). The levies are paid on domestic and export sales of honey. Table 3 Honey Levy Types and Distribution Levy Types Total Levy Honey Research and Development Levy (R&D) 1.5 cents per kilogram of honey Emergency Animal Disease Response (EADR) Levy 0.7 cents per kilogram of honey National Residue Survey (NRS) Levy 0.1 cents per kilogram of honey *There has been a recent amendment where the distribution between the EADR Levy and the NRS Levy was changed from 0.5 to 0.7 cents per kilogram of honey sold and from 0.3 to 0.1 cents per kilogram of honey sold, respectively. This amendment was as a result of the honeybee industry preparing a proposal that the Minister for Agriculture, Fisheries and Forestry, the Hon. Tony Bourke, approved, acknowledging that it successfully met the Australian Government Levy Principles and Guidelines. The levy is paid at first point of sale of the honey, and it is the responsibility of the producer of that honey, or any other products from the honey, to pay the levy. The levy is not imposed if the sale of honey by a person is not more than 50 kilograms in a given month or if the total weight of honey sold in a year by the producer, including any other honey used by that producer in that year in the production of other goods, is not more than 600 kilograms (Parliament of Australia, 1999). 15

30 There is also a statutory levy for the sale of queenbees. This levy is paid at first point of sale of queenbees as is the case for sale of honey (Table 4). Table 4 Queenbee levy Queenbee levy Queenbees sold for $20 and under Queenbees sold for over $20 Total Levy 0.5% of the sale price 10 cents per queenbee What are the levies purpose and administration arrangements? Honey and Queenbee R&D Levy (R&D) The R&D levy is intended to enable the honeybee industry to pool their resources to undertake research and development activities which are not feasible or likely to be undertaken in circumstances where individual producers would have had to undertake their own development activities. The R&D levy is matched by the Australian Government on a dollar-for-dollar basis up to 0.5 per cent of gross value of industry production. The Rural Industries Research and Development Corporation (RIRDC) is a statutory authority established by the Primary Industries and Energy Research and Development Act 1989 (PIERD Act) to work with industry to invest in R&D for a more profitable, sustainable and dynamic rural sector. RIRDC is charged with coordinating the industry s research effort. In , industry collected $ via statutory levies (RIRDC, 2008) on honey production, the Australian Government provided $ of matching contribution and $ was collected from other sources. Statutory R&D levies for the queenbee program in the same year were $7686. Industry expenditure on research projects through the RIRDC's Honeybee R&D program in was approximately $ (RIRDC, 2008). RIRDC directs the industry s national research program which is shaped by a five year strategic plan developed in consultation with stakeholders. Projects are selected and managed by the RIRDC Honeybee R&D Advisory Committee which makes recommendations on the allocation of project funding to the RIRDC Board who make the final decision on funding. Current levy funds are not authorised for use for market development or agri-political activities. The Honeybee R&D Five Year Plan seeks to improve industry productivity and profitability, and aims to achieve this by providing support in the following areas: pest and disease protection (nominal allocation of 45% of available funds) productivity and profitability enhancement to lift beekeeper income (15%) resource access security and knowledge (10%) pollination research 3 (10%) 3 Moves are currently being made to form a body called Pollination Australia (PA), an alliance of the honeybee industry and the horticultural and plant-based industries most dependent on honeybee pollination. PA will be funded and managed by member organisations in beekeeping and the crop industries reliant on honeybees for pollination. RIRDC manages the 16

31 income diversification including new product development (10%) extension, communication and capacity building (10%). Emergency Animal Disease Response (EADR) 4 A major biosecurity risk area for the honeybee industry is animal movement. Also, there is a range of exotic pests and diseases which pose a high risk to the entire apiary industry and other parts of the agricultural sector. As noted in the previous chapter, one of the highest priority threats is an incursion of Varroa, the management of which would require expensive eradication and control measures. CSIRO s modelling of the costs of an unchecked Varroa incursion to Australian plant industries would be between $ $50.5 million per year over the next thirty years (premised if no response were mounted after an incursion) (CSIRO, May 2008). The Emergency Animal Disease Response Agreement (EADRA) brings together the Australian Government, State and Territory governments and industry groups, and provides an innovative means to combine the following approaches to combating emergency animal diseases: participation and cooperation providing a means for a collaborative approach to emergency disease response; risk management requiring that all parties take reasonable steps to minimise the risk of a disease occurrence through development of biosecurity plans; detection and response committing to early detection and effective response to disease; cost sharing committing each party to sharing the costs of responding to an emergency disease, and training encouraging industry preparedness and efficient and effective responses by providing training for personnel who will take part in an emergency disease response. Animal Health Australia provides administrative services for the company, Honey Bee Disease Contingency Fund Pty Ltd, which was established in May 2003 by the AHBIC and Animal Health Australia. This fund will be used to support any activity associated with honeybee pests and diseases and their management and eradication which the company (as Trustee) considers is likely to benefit or enhance the Australian honeybee industry. National Residue Survey (NRS) The primary purpose of National Residue Survey (NRS) is to facilitate key export and domestic market access for participating industries (DAFF, 2009) by: providing residue testing services that are technically sound, risk-based and structured to meet market requirements, within a specified budget; providing scientific and policy advice on residues and contaminants to the Australian government and industry; underpinning participating industries quality assurance projects; Pollination R&D program, which has an R&D advisory committee and initial funding from RIRDC and Horticulture Australia Limited (HAL). 4 At the time of finalising this report there was a process underway which would move the honeybee industry from Animal Health Australia to Plant Health Australia. The flow on impacts for management of the EADR Levy need to be confirmed. 17

32 providing support to industry and government in settling matters concerning residue-related trade incidents, and maintaining a database of residue test results for the use of participating industries, when legally acceptable. The NRS program for honey aims to provide assurance to Australia's trading partners and domestic consumers of the high level of compliance of Australia's honey with national and international standards. Benefits of this program certainly attach to Australian honey producers by virtue of brand confidence for the Australian product. NRS results form the basis for Australian Quarantine Inspection Service (AQIS) certification for compliance with the residue requirements of importing countries and Australian standards. The NRS honey residue testing programs cover a range of pesticides and other chemicals. Sampling is conducted in each state on the basis of production volumes. Residue testing programs are managed in accordance with agreed arrangements between AHBIC, AQIS and NRS. The operative rate for this levy is 0.1 cents per kilogram of honey. On a broader basis, the increasing use of quality assurance testing by the industry, and the establishment of a code of practice, which is promoted by AHBIC, further aims to provide product credibility to Australia's trading partners and domestic consumers. Who pays and collects the levies? The producer, or the person who owned the honey immediately before sale, or the person who uses the honey in the production of other goods is liable to pay the levy (DAFF, 2009). Where the producer sells the honey to a buying/selling agent, processor or shopkeeper it is the buyer s responsibility to lodge a quarterly return, on behalf of the producer, unless the producer has received an exemption 5. Where the producer sells the honey directly via markets or other retail opportunities, it is their responsibility to pay the levy via an annual return (DAFF, 2009). The Levies Revenue Service (LRS) is an agency within the DAFF which collects and disburses levies, on a cost recovery basis, on behalf of the honeybee industry. The cost of collecting the levy for the honeybee industry for was 7% of total collected for the honey levy and 38% for the queenbee levy (DAFF - Levies Revenue Service, 2009). LRS disburses the levy, and any matching government funding, to the relevant organisation to administer, which in the case of the honeybee industry is the RIRDC for the R&D levy, Animal Health Australia (AHA) for the EADR levy, and the Department of Agriculture, Fisheries and Forestry (DAFF) for the NRS levy. What legislation and regulations enacts the honeybee levies? The Commonwealth Constitution places legal constraints on the way a levy can be collected and disbursed. There is a requirement for three pieces of complementary legislation and/or regulation to allow imposition, collection and disbursement of levies. The relevant acts and related regulations for the honeybee industry are presented in Figure 6. Where an industry is considering a change to their levy arrangements it should be aware that the changes may impact in one or more legislative areas. 5 The exemption only applies if the producer sells less than 50 kilograms of honey per month or less than 600 kilograms of honey per annum. No other exemptions apply. 18

33 Figure 6 Legislation and regulations for Honeybee industry levies Imposition Primary Industries (Excise) Levies Act 1999 Primary Industries (Customs) Charges Act 1999 National Residue Survey (Excise and Customs) Act 1998 Disbursement Primary Industries and Energy Research and Development Act 2000 National Residue Survey Administration Act 1992 Collection Primary Industries Levies and Charges Collection Act 1991 Primary Industries Levies and Charges Collection Regulations 1991 How much is collected from levies? The LRS Report to Stakeholders shows the combined honey and queenbee levy collection totalled $ for the financial year (Table 5). This total does not include the Australian Government s matching funding contribution for R&D. Table 5 Funding collected from honeybee industry levies Total $ Collected Levy Charges for Levy Type (% of collected) Honey levy $ $ $ (7%) Queenbee levy $8 000 $8 000 $3 000 (38%) What are the existing state/territory government registration systems for beekeepers? The majority of states and territory governments require beekeepers to compulsory register their hives or for individuals who are beekeepers to formally register. Table 6 summarises the registration requirements for each jurisdiction. Northern Territory only recently established compulsorily registration of beekeepers from September The Australian Capital Territory does not have a registration system and Tasmania has a voluntary registration approach. 19

34 Table 6 State and Territory registration requirements for the honeybee industry State or Territory Compulsory Registration A Disease notification & controls B Hive ID C Apiary management and hive movement D Compensation E Other 20 Australian Capital Territory New South Wales Northern Territory Queensland na na na na na Beekeepers with one or more hives, even if registered in another state/territory, are required to register with Department of Primary Industries under Apiaries Act 1985 Registration of beehives under Livestock Act 2008 since 1 September 2009 Registration of beehives with the Department of Primary Industries and Fisheries under Apiaries Act 1982 For beekeepers in the ACT, the 2005 repeal of Apiaries legislation saw the abolition of the requirement for beekeepers to register their hives and apiaries. The disease aspects of beekeeping are now regulated under the Animal Diseases Act 2005 and Part 4 of the Animal Diseases Regulation The registration fee is for two years. na na na na No registration charge is levied in the Northern Territory. Registration focus is on owner contact details and hive location. Movement controls exist under Stock Diseases Regulations for the importation of bees and related products into the Northern Territory, and are in place to control the spread of bee diseases that exist in certain areas. Annual registration fee $ There are a number of compliance conditions that apply for land/access and tenure relating to forestry, main roads and natural resource management situations.

35 State or Territory Compulsory Registration A Disease notification & controls B Hive ID C Apiary management and hive movement D Compensation E Other South Australia Registration of beehives with Primary Industries and Resources South Australia under Livestock Act 1997 na Annual registration fee is $ Hive contribution: Beekeepers with 5 hives pay $2, or beekeepers with 6 hives pay 40 cents per hive. American foulbrood disease Honey Test: $ Under Primary Industry Funding Schemes (Apiary Industry Fund) Regulations 2001 $0.40 per hive (excluding nucleus hives) or $2.00, whichever is the greater sum, is required to be paid to South Australian Minister for payment into the Apiary Industry Fund. The fund can be used for undertaking programs relating to the apiary industry or apiary products; or payment of the reasonable operating and management expenses of the Apiary Industry Advisory Group. The voluntary code of practice emphasises the correct usage of appropriate chemicals in the control and eradication of the honeybee diseases American foulbrood disease and European foulbrood disease. Government activity relates mainly to the overseeing of disease management and pest freedom, the security of long-term access to production forests and World Heritage Area stands of leatherwood, the licensing of apiary sites and compliance. 21 Tasmania No compulsory registration na na Victoria Registration of beehives with Department of Primary Industries under Livestock Disease Control Act 1994 Annual registration fee: 60 hives pay $15; or > 60 hives pay 25 cents per hive.

36 State or Territory Compulsory Registration A Disease notification & controls B Hive ID C Apiary management and hive movement D Compensation E Other 22 Western Australia Registration of beehives with WA Dept of Agriculture and Food under Beekeepers Act 1963 na Annual beekeeper registration fee $ Agricultural Produce Commission Beekeepers Producers' Committee established 2003 has determined a two-tier fee for Service charge as of 2008: Service charge per beekeeper per annum = $15 which is used for education and communication activities; Service share per bee hive in production = $1.10 per hive used for disease control/monitoring and disease research purposes. The 2008 budget provided for surveillance and disease monitoring R&D for biosecurity and apiary management, and communication by newsletter three times per year updating beekeepers on bio-security and industry related matters. Key: A - Compulsory Registration If a beekeeper owns one or more hives, registration is required under specific apiaries act or some broader livestock legislation with the relevant state or territory primary industries agency; B - Disease Notification & controls Registration usually requires a beekeeper to undertake to check all hives for diseases and pests, and to advise the appropriate authority or inspector of any sign of a notifiable pest or disease; C - Hive ID Upon registration a unique registered brand is usually issued to each beekeeper. This brand is not transferable to other beekeepers, and is cancelled or suspended when beehives are no longer kept by that person. The onus is on beekeepers to notify the appropriate authority when they dispose of their bees; D - Apiary classification & management At the time of registration, beekeepers are requested to identify all of their apiary sites. This is to allow timely, direct contact with the beekeeper if necessary. There are many regulations dealing with minimum distance between apiaries, hive disposal and conditions of seizure by an inspector in the event of disease and other circumstances; Hive movement Registered beekeepers may be eligible to receive compensation if their bees and/or hives are destroyed or sterilised due to infection by a declared disease such as American foulbrood ; E - Compensation is paid from money derived from registration fees. na not applicable Sources: ACT - Beekeepers Association of ACT Woden ACT: NSW - NSW Apiaries Act 1985 a guide to the main sections PRIMEFACT 245 June 2007; NT - Northern Territory Department of Primary Industry flyer notifying compulsory registration of beehives. Issued August 2009; QLD - Guidelines for Rural Beekeeping in Queensland. QI Compiled Hamish Lamb Apiary Officer Queensland Primary Industries and Fisheries Department of Employment, Economic Development and Innovation; SA - Primary Industries and Resources SA (PIRSA) : TAS - The Department of Primary Industries, Parks, Water and Environment (DPIPWE): VIC - Beekeeping and the Livestock Disease Control Act 1994 Note number : AG 1100 Updated: April 2009; WA - Department of Agriculture and Food WA:

37 What are previous levy arrangements that may be relevant? Over the years, the honeybee industry has had levies applied for a variety of purposes and outcomes, culminating in the current levy regime funding R&D, biosecurity and residue survey activities. In 1962, after the industry, through the Federal Council of Australian Apiarists' Associations, asked the Government to provide for the establishment of a board to conduct promotional and research activities and to regulate Australian exports of honey, the Australian Honey Board was established and funded under the Honey Industry Act In 1974, an export charge of 0.3 cents per kilogram was introduced under the Honey Export Charge Act 1973 to provide additional finance for the Honey Board to regulate honey exports and undertake R&D and promotion activities. At that time, exporters of honey required an export licence issued by the Government on the recommendation of the Australian Honey Board. A levy or charge was imposed on all honey sold domestically and overseas to fund the operations of the Board. In , the levy amounted to 1.8 cents per kilogram on domestic sales and 0.5 cents per kilogram on export sales. In addition, there was a research levy of 0.25 cents per kilogram on all honey. Total expenditure by the Australian Honey Board in was $347,480, of which about 60 per cent came from the levy imposed domestically, 18 per cent from the export charge, with the remainder from grants and miscellaneous receipts. Faced with the dissolution of the Australian Honey Board, the industry joined the Australian Horticulture Corporation (AHC) from 1993 for a trial period of two and one-half years, with a dedicated Honey Desk and through which control of exports of honey and honey products became the responsibility of the AHC. Since that time, the honeybee industry has positioned itself within RIRDC for its R&D needs with direct funding arrangements through AHA for biosecurity requirements and DAFF for the residue survey arrangements. 23

38 6. What is driving the proposal to change the honeybee levy approach? Perspectives were obtained from over 35 people from within the honeybee industry (Table 7 and Table 8). These people had different roles including key roles in industry associations representing commercial and/or non-commercial beekeepers and packers. The consultations identified that the motivations for changing the industry s levy arrangements were based around three inter-related themes: 1. Obtaining consistent resourcing and funding security for industry peak body, AHBIC; 2. Recognition of the industry s significant biosecurity threats and maintaining its ability to fund emergency and on-going threat response measures, and 3. Fairness and equity issues, such that the requirement to pay the levies is aligned with those who are likely to benefit from what the levies resource (e.g. R&D benefits, emergency animal disease threat management and residue testing). Each of these drivers is further discussed in this section. Resourcing AHBIC There was one theme which dominated industry consultation in this project in terms of its consistency and frequency of mention, namely that AHBIC needed to gain a more effective and secure funding basis to enable it to carry out its important work. This driver was the most consistent viewpoint expressed by major state associations and their representatives. These bodies were, through their membership of the Federal Council of Australian Apiarists Association (FCAAA), members of AHBIC sitting on Council meetings. In the 2009 AHBIC Chairman s Report to the Annual General Meeting and Conference on the outcome of a recent AHBIC Review it was stated that: The present structure of AHBIC does not seem to be able to attract enough funding for it to operate with a voluntary funding mechanism. A proposal of a hive levy to replace the existing levies on production should be considered as a more equitable way to fund research, testing and Biosecurity Animal Health levies. While several stakeholders acknowledged that use of statutory funds for agri-political purposes was not allowed, there seemed to be scant recognition that use of statutory funds for organisational funding may also be prohibited. Stakeholders consistently saw the need for AHBIC to plug a funding gap created by diminished support by producers who had previously had the AHBIC voluntary levy (membership subscription) deducted as a business expense from market returns. While it may seem an obvious step for the industry to seek the Australian Government s assistance to set up a compulsory levy to help resource the industry for important work in the area of biosecurity representations this is not something that the Australian Government would consider under terms of its Levy Principles and Guidelines (DAFF, 2007). Even though the industry s intention is well-meaning, and there is likely to be a belief that the commercial and non-commercial sectors, and the public, would benefit from the pooling of resources and cooperative behaviour that a compulsory levy 24

39 approach could provide, precedence from previous attempts from other industries and feedback from DAFF during this project suggest that this is not an option that will be considered. This project acknowledges the endemic and urgent need for the industry to resource its representation and support services, however, it is neither feasible nor appropriate that this be resolved through the compulsory levies system by the Australian Government. Many industries have put proposals to the government in an attempt to secure compulsory levies for supporting industry association and peak body activities, and they have consistently failed. In this context, it may be worth exploring the role of the Australian Government in agricultural industries. There are always advantages and disadvantages to government involvement, and for this reason it is important to examine the modern role of government if intervention is to be effective and non-imposing for industry (Centre for International Economics, 2005). Ideally the role should be to: provide assistance to activities that are in the national interest, but that are not being addressed or not being sufficiently addressed from within the relevant industry or by another level of government, promote efficient allocation of resources and full accounting of all costs and benefits to individuals and communities, increase the capacity of individuals, industries and communities to help themselves and encourage self-reliance. It is on the latter point regarding self-reliance of the industry, particularly, that government would object to the proposal for the industry to seek government to support for a compulsory levy to provide for industry peak body functions. Given the above preferred roles, extensive empirical and theoretical literature exists on both the role of government where markets fail and the costs of inappropriate government intervention (government failure) (CIE 2005). Key lessons from the literature are that government should: stick to safe areas where there is some comparative advantage for government in the provision of an activity or service, be pragmatic and cautious about its involvement by building in safeguards against capture by vested interests, and be ready to adapt its role in response to the changing economic environment and lessons learnt from the successes and failure from past interventions. There is an underlying theme of less is more, conservatism and low-risk when it comes to intervention by the Australian Government. Emphasis is placed on letting the market function effectively with minimal intervention. It would appear that allowing an individual to decide whether there is commercial value in being a member of an industry organisation is not a matter in which government is going to become involved. 25

40 Table 7 AHBIC Member association consultation feedback Industry Stakeholders Funding for AHBIC Biosecurity threats and its ability to fund threats High industry priority Varroa when not if Fairness and equity considerations Comments or other issues raised Queensland Beekeepers Association Inc. Reported that they thought avoidance issue existed for either levy type. Noted the number of capture points for payment will shape collection costs. Encouraged utilisation of state registration system for a hive levy. New South Wales Apiarists' Association (Inc) Considered there is leakage in current honey levy system via direct sales through farmers markets and other avenues and LRS could step up compliance investigations. Wanted levy imposed on imported honey. Encouraged utilisation of state registration system for hive levy. 26 Victoria Apiarists Association - Identified current system suffers from levy avoidance mainly via fresh market sales of honey through farmers markets. Encouraged utilisation of state registration system for hive levy. Tasmanian Beekeepers Association Suggested exemption level may be needed as cost of collections could be an issue. Encouraged utilisation of state registration system for hive levy. South Australian Apiarists' Association Felt that amateurs would support if the case for the new levy was well constructed and presented. Encouraged utilisation of state registration system for hive levy. Western Australian Farmers Federation (Inc) - Beekeepers Section = substantive mention or reference Considered that non-commercial beekeepers should not be exempt from the levy. Noted four queenbee hives were equivalent to one standard hive. Encouraged utilisation of state registration system for hive levy.

41 Table 8 Other industry stakeholder s consultation feedback 27 Industry Stakeholders Australian Queen Bee Breeders Association National Association of Crop Pollination Associations Funding for AHBIC Biosecurity threats and its ability to fund threats High industry priority Varroa when not if Fairness and equity consideration s Major packer & marketer - NT Beekeepers Association Amateur Beekeepers Association Inc Beecroft (NSW) WA Beekeepers Association Inc. North Shore Beekeepers Assoc (Inc) (NSW) Northside Beekeepers Assoc Inc Carseldine (QLD) Ipswich and West Moreton Beekeepers Association Inc., (QLD) Comments or other issues raised Supported a new levy without exemption but acknowledged some concessions may be required at lower levels. Supported a move to a hive based levy system but acknowledged there could be issues of practicality including need for an exemption level and collection system/costs. Believed industry would survive varroa incursion with industry contraction tempered by application of chemical controls and increased costs. Not supportive of a hive levy on proposed basis because of little perceived benefit to NT industry. Aware of biosecurity vigilance and sees Territory government s approach through compulsory registration as the means of keeping the Territory clean. Thought it would be fair for non commercials to contribute but benefits would need to be demonstrated. Doubted the ability of the NSW registration system to provide a valid/credible basis for a fair hive-based system due to understatement of hive numbers. WA funding model for state apiarist services was seen as a preferred funding option but thought general industry support could be problematic. Considered direct sales through farmers markets represents a source of leakage for industry Considered would not be unreasonable for amateurs to pay if there were benefits, but noted that if amateurs have to pay they must get a say in how funds are expended. - - No support for a new levy. Saw limited direct benefits. - Considered Commonwealth Government should accept recommendations of House of Representatives Standing Committee on Primary Industries and Resources in relation to fairness issues within the industry. Thought a hive levy would be unworkable because high collection costs would require a very high levy charge which would then make

42 = substantive mention or reference beekeeping unviable. Avoidance of registration of hives would be encouraged with a hive levy and this would pose a substantial risk for industry in responding to Varroa incursion. 28

43 Management of Biosecurity Threats The More Than Honey: the future of the Australian honey bee and pollination industries - Report of the inquiry into the future development of the Australian honey bee industry (House of Representatives Standing Committee on Primary Industries and Resources, May 2008) states: The threat of pest and disease incursions is the most significant issue facing the honeybee industry and honeybee pollination dependent industries. Incursions of exotic bee pests and diseases have the potential to not only severely disrupt the honeybee industry, but also many of our agriculture and horticulture industries. Preventing the introduction of exotic pests and diseases must be a priority of governments and industry. Effective border security measures and strategies to deal with incursions are critical. Investment in R&D to identify and manage biosecurity threats is essential. One of the most consistent themes through this project s consultations with industry has been concern about biosecurity issues, in particular a Varroa mite incursion, and the impact this would have for the entire industry through increased costs for control, eradication and/or management. Many stakeholders reported that they felt the Australian industry would mirror the New Zealand experience and see a substantially reduced non-commercial sector alongside a major depletion of feral honeybee colonies. Commercial operators would also experience readjustment in hive numbers because of the increased costs of labour and chemical control management requirements. Nevertheless, most stakeholders felt the industry would recover in a period of time and adjust to the new circumstances, albeit at a reduced scale for some. Many mentioned how the broader agricultural and horticultural community will need to place a higher value on pollination services, although several honey producers consulted indicated that they thought honey would remain the dominant industry product. Notwithstanding the variance in views as to the nature and effect of a Varroa incursion, there was universal acknowledgement by industry and government representatives consulted during this project that biosecurity issues are paramount for the industry, and that there is a need to provide for adequate funds to meet any future challenges. Two issues that need to be explored in this regard relate to the necessary amount of resourcing, and the function(s) for which the funds might be used. The honeybee industry, through AHBIC, is part of the Emergency Animal Disease Response Agreement (EADRA), which commenced in The EADRA provides an innovative approach for cost sharing and funding the management of emergency animal disease threats to Australia (Table 7). This cost-sharing approach means that industry needs to be able to contribute its share of resources to the management of emergency disease threats. 29

44 Table 9 Cost sharing of Emergency Animal Disease Response Category of Disease These are emergency animal diseases that predominantly seriously affect human health and/or the environment (depletion Category 1 of native fauna) but may only have minimal direct consequences to the livestock industries. These are emergency animal diseases that have the potential to cause major national socio-economic consequences through very serious international trade losses, national market disruptions and very severe production losses in the livestock Category 2 industries that are involved. This category includes diseases that may have slightly lower national socio-economic consequences, but also have significant public health and/or environmental consequences. These are emergency animal diseases that have the potential to cause significant (but generally moderate) national socioeconomic consequences through international trade losses, Category 3 market disruptions involving two or more states and severe production losses to affected industries, but have minimal or no affect on human health or the environment. These are diseases that could be classified as being mainly production loss diseases. While there may be international trade losses and local market disruptions, these would not be of a Category 4 magnitude that would be expected to significantly affect the national economy. The main beneficiaries of a successful emergency response to an outbreak of such a disease would be the affected livestock industry(s). Source: (Phillip Fox Lawyers, Variation 2009) Government Funding 100% 0% Industry Funding 80% 20% 50% 50% 20% 80% The EADR Levy is the mechanism that has been put in place to collect funds for the industry which are held in a Honey Bee Disease Contingency Fund Pty Ltd (the Contingency Fund) 6 established in May 2003 by the AHBIC and Animal Health Australia. This fund is used to support any activity associated with honeybee pests and diseases and their management and eradication which the company considers is likely to benefit or enhance the Australian honeybee industry. The agreement that sets out the purpose and powers to expend funds from the Contingency Fund was reported not to be a public document that could be reviewed. The authors of this report were informed that it was a broadly-worded document and allowed for appropriate action in respect of health, disease and training matters for the honeybee industry. The agreement reportedly does not preclude AHBIC drawing on funds to provide services that improve the industry s disease management and preparedness. The Contingency Fund is managed by four trustees two nominated by AHBIC, one member from Animal Health Australia and one independent person. Animal Health Australia advised that to date a little over $ per annum has been submitted to the Contingency Fund from the EADR Levy since its establishment. The Contingency Fund currently holds approximately $ and its funds have been expended sparingly since its establishment. 6 It should be noted that this Contingency Fund should not be confused with the Federal Council of Australian Apiarists' Association s Contingency Fund as these are two different arrangements. The Federal Council of Australian Apiarists' Association Contingency Fund was set up in the late 1980 s and continued until AHBIC was established (Cannon, 2009). 30

45 The nature, extent and cost of managing honeybee industry threats will be critical for the honeybee industry in its future dealings, irrespective of the final position taken in respect to the levy funding question currently being proposed. Industry needs to more fully examine and, where possible, document the level of resources the industry requires to manage biosecurity threats. This should include documented scenarios of possible costs and impacts to the industry if an incursion were to occur. The authors of this report were unable to find information on the costs of managing a disease outbreak and the on-going plans and costs for proactive biosecurity preventative activities. As members of the EADRA, the industry is part of the AUSVETPLAN, which is a series of technical response plans that describe how Australia will respond to specific animal disease incidents. Under the AUSVETPLAN, there is a draft Disease Strategy Bee diseases and pests which provides technical information on the known diseases, principles of control and eradication, strategies for control and eradication and cost sharing arrangements. It does not include any costs or plans for activities that occur outside a disease incursion (Animal Health Australia, 2009). Biosecurity threats for the industry are real and significant. Consultation suggests an outbreak of Varroa is not a matter of if the incursion will occur, rather it is a case of when it will occur. Based on this prospect, the authors of this report believe that the driving need and desires of the industry to have sufficient resources for biosecurity management and eradication are legitimate, and align with the Australian Government s agreed intended purpose of industry-wide levy funding (DAFF, 2007). The existing EADR Levy provides a mechanism for the industry to collect resources for this purpose. The recently revised distribution to the EADR Levy of 0.7 cents per kilogram of honey sold (from 0.5 cents) and consequent reduction to the NRS Levy of 0.1 cents per kilogram of honey sold (from 0.3 cents) underscores industry s concerns in this regard. The underlying market failure and public good benefit for resourcing honeybee industry biosecurity management and responses in a fair and equitable manner have already been supported by the Australian Government by virtue of the statutory levy arrangement in place for biosecurity. An assumption for this project is that the industry is seeking additional resources over and above what can be obtained for biosecurity from the existing levy system even after the recent levy distribution changes. Therefore, any hive-based levy would need to be able to provide funds additional to the current levy approach to be of value to the industry. 31

46 Equity of Levy Payers Most commercial stakeholders expressed the view that under the current honeybee industry levies approach relatively few beekeepers pay the levies, whilst the benefits of the purpose of the levies is potentially received by a much broader range of beekeepers both commercial and non-commercial. While there were around registered beekeepers in (ABARE, 2008), the levy was only paid by beekeepers who sold 600 kilograms or more honey per annum. Based on the existing data it is difficult to identify how many of the beekeepers actually pay the levy. If we are to assume that all of the beekeepers who own or manage 50 or more hives (1702 beekeepers) produce more than 600kg of honey, then using ABARE survey data, at least 17% of beekeepers are currently paying the levies (ABARE, 2008). We would expect that some proportion of the remaining 8206 beekeepers pay levies but it is difficult to quantify how many within this group. The commercial industry stakeholders consulted during this project reported that biosecurity management and potentially R&D outputs of the current levies benefit all beekeepers, both commercial and non-commercial. There was a claim that if the non-commercial beekeepers will benefit then they should also contribute. Levy avoidance and volume of honey being sold directly by producers increasing There were mixed claims from industry stakeholders on levy avoidance. Many industry association representatives suggested that they thought levy avoidance through producer/direct consumer sales (e.g. via farmers markets and roadside sales) was occurring, but could not quantify the level and extent of this trade. Some commented that they thought levy avoidance in their jurisdiction was being policed well, while others expressed reservations about the level and extent of compliance surveillance. There were claims that the increased popularity of farmers markets and similar direct producer retail opportunities has seen an increased volume of honey being sold by producers directly to the consumer. A recent study, commissioned by RIRDC on Farmers Markets identified that farmers markets in Australia are growing and are likely to continue to grow (Coster & Kennan, 2005). Twothirds of farmers markets surveyed reported that they have been operating for two years or less, indicating a possible growth trend. Over 80% of farmers markets surveyed reported that they sold honey at their markets. If we are to agree that there is an increased volume of honey being sold directly to the public then this raises two issues with respect to the equity of the industry s current levies: firstly, is there an issue of levy avoidance by producers selling directly to the public in volumes over 600 kilograms that needs to be better policed? secondly, if the number of producers selling honey directly to the public in quantities less than 600 kilograms is increasing, then is the current exemption level set at the wrong level? For this study, it should be considered whether resolving some of the fairness concerns of the industry could be addressed more effectively either through an amendment to the existing levies, or through the proposed hive-based levy approach. No data was available to test how much honey is being sold directly to the public via farmers markets and the like, but many stakeholders submitted anecdotal evidence to support the incidence of levy avoidance through this channel. Several reported that in recent years marketing margins for domestic honey had been squeezed, with many smaller producers moving from their usual packing/marketing 32

47 outlets and selling more honey direct at the retail level. This trend had fostered levy avoidance in the eyes of many stakeholders. If we look at the statistics provided by the state apiarists to ABARE for , there are 8216 beekeepers that own or manage less than 50 hives, which equates to 82% of people involved in beekeeping either commercially or non-commercially. ABARE (2008) estimated that the average production per bee hive was 51 kilograms per annum. If we use this estimate of average production, then a beekeeper would only need to have 12 hives to make about 600 kilograms of honey. If we were to be more conservative with the ABARE average honey production per hive estimate and reduce the likely average production from beekeepers with less than 50 hives to say 30 kilograms per hive, then 20 hives would be required to reach the threshold. The authors of this report understand that the exemption level of 600 kilograms per annum was set to remove from the large number of non-commercial producers, mainly concentrated in peri-urban areas, liability to pay the honey levy, principally because the collection and compliance costs would consume any revenue advantage to the broader pool of funds (DAFF, 2009). Benefits of levies to beekeepers The basic premise upon which statutory levies are based is that market failure exists and requires government to intervene to ensure that net benefits for industry and the community are achieved. With the current honey levy in place, one can fairly accept that a case has already been agreed by the Australian Government that market failure exists for industry R&D and biosecurity resourcing. While there can be little doubt that the commercial sector of the honeybee industry benefits from the current R&D and biosecurity arrangements, there is however, little or no hard information identifying the level and extent of benefits for non-commercial beekeepers who currently do not contribute to the payment of the levies. This is a critical factor for any future industry drive to gain support for a new hive levy because non-commercial producers would have to be satisfied that they would receive value from levies if they are to support the proposal. The current research program under RIRDC aims to deliver the benefits of the research program to the entire industry, and consultation feedback was consistently positive about the research undertaken, especially from stakeholders who represented commercial interests. The more active representative associations for the non-commercial beekeepers also shared a positive view about the benefits of the research program, particularly where association members attended RIRDC field days and workshops. Notwithstanding this feedback, the authors of the report advise caution in extrapolating from such a small sample of stakeholders. Risks posed by pests and diseases have the potential to impact all parts of the industry and the scenarios presented by the industry, through CSIRO modelling, suggest that the impact of a Varroa incursion would have significant effect on the structure of the industry, particularly the noncommercial industry participants. Estimating the extent to which this predicted outcome would take place is problematic in the absence of a much higher-order analysis. In addition, if the industry faces major structural adjustment in response to a Varroa incursion, logic does not support a move from an established levy collection system to an unproven system premised on hives whose number could reasonably be expected to substantively change, both in terms of absolute numbers and distribution between commercial and non-commercial usage. AHBIC, and some of the other industry associations, stated they believed the non-commercial sector posed significant risks and challenges for the management of pests and diseases. Contrary opinions to this viewpoint came from several non-commercial industry associations which reported that they thought the greater risk would come from the commercial sector where, in the face of a Varroa incursion, more attention would be paid to maintaining economies of scale rather than adopting more intensive hive management systems which were more likely to be employed at the hobbyist level. 33

48 Under the current arrangements, where the industry has to contribute to the cost sharing of managing disease incursions, the levy burden falls almost entirely on this sector for payment. There again, one could argue that the commercial sector should pay the most because they stand to gain the most from biosecurity protection and response management. Obviously there is a need for the commercial sector to pay, but there is also potentially a case for consideration of the non-commercial sector making a contribution to biosecurity resources. It is implied under the EADRA that industry has a role in encouraging industry biosecurity preparedness and efficient and effective responses through the provision of awareness-raising activities and training. The industry s existing resources are insufficient to undertake these activities. Consistent reporting from commercial industry stakeholders felt the adoption of a unified hive levy across both commercial and non-commercial industry would answer industry concerns about fairness. Using absolute numbers of beekeepers, the honeybee industry has a substantive number of noncontributors, with the bulk of the levy burden falling on top end commercial honey producers who in the main, pay most of the funds for R&D, biosecurity and NRS. The authors of this report can appreciate the goal of a fairer and more equitable system; however, the reality of seeking this outcome must be tempered by consideration of the practicalities and costs for collection. Key conclusions on issues driving proposed levy changes A major driving need to change the industry s levy arrangements and introduce a hive-based levy reported during consultation for this project was to secure funding and resources for the peak industry body, AHBIC, as they have not been able to secure sufficient funding through voluntary approaches. Under the existing guidelines, it is not appropriate to seek the Australian Government to set up a compulsory levy to resource an industry peak body, regardless of the levies approach that is used. The industry s interest in collecting more resources for biosecurity management has merit. It is unclear as to how much resource would be sufficient. Should the industry seek to go ahead with seeking additional funds for this area of work, there would be value in developing an action plan which maps the priorities, proposed activities, budget requirements and information on who would undertake the tasks. Investigation on whether the hive-based approach is the most efficient approach to attracting the desired additional resources by the industry is worth exploring. The issue surrounding fairness of levy payers and the possible leakage that is occurring through honey sales at farmers markets and other direct sale opportunities does appear to be a growing one. Even if this issue is in perception, there is value in more information being obtained on the volume of honey being sold directly via farmers markets, the likely trend in sales directly to the public, and the attributes of the beekeepers who are selling honey through this avenue. The hivebased levy approach does offer opportunities for creating a fairer payment system if all were to pay, as it removes any decision on where the exemption level should be. This aspect is further explored later in the report. 34

49 7. How could the hive-based levy approach work? This section explores the hive-based levy approach, how it could work, the revenue it could collect and possible opportunities or barriers. It incorporates desktop data analysis and input from industry and government consultations. Can the production input be used as the basis of a levy? DAFF reported that an industry levy must be based on a clear production input, output or units of value of production (DAFF, 2009). A hive is the base input for production of a range of honeybee industry products and services ranging from honey through to pollination. In terms of practicality, there is very little ambiguity about what constitutes a beehive and so, as a unit for levy funding, it offers scope and opportunity. The scoping study teased out the options for where the levy could be collected for the honeybee industry centred on the requirements that it must be based on a clear input or output from the industry. Two options were identified: one, the existing option at points of sale of honey and the second, the beehive. Beehives have a reasonably long shelf life and are mostly manufactured by beekeepers. There are a small number of manufacturers of beehive equipment operating across Australia but they are not main suppliers of beehives due to a large portion of beekeepers making their own. The hive represents a critical and fairly uniform unit of production for a new levy, however there is an issue of hive equivalence for queenbee production. Nucleus hives are smaller structures and in New South Wales, four nucleus hives are deemed to be equivalent to one standard hive. There are precedents in other industry sectors which collect their levies using inputs for their production examples include the mushroom industry, which uses the input of a spawn and the nursery industry (DAFF-LRS, 2009), which uses the input of potted plants but for ease of collection the levy is paid on purchase of pots, which are used in production (DAFF-LRS, 2009). In both the mushroom and nursery industry cases, levy capture is concentrated in the hands of two producers of spawn for the mushroom industry and a few manufacturers of plant pots for the nursery industry. These inputs are critical for production and as a consequence, their high annual usage rate makes for very responsive levy revenue performance for industry services funded under the arrangement. A hive levy offers a reasonably uniform basis for levy production and has the potential to facilitate the industry goal for a fairer levy in that all hives can attract a levy for funding of services that will benefit both the commercial and non-commercial sectors. A beehive has a reasonably long lifecycle, but new stock or replacements for existing hives can be manufactured by individual beekeepers. A levy based on hives thus has a high reliance on the integrity of personal beekeeper declarations of hive holdings. This issue has implications for collection arrangements and associated cost of collections and compliance. A suggestion arose from the honeybee industry regarding whether the levy could be per beekeeper. The authors investigations on the Australian Government Levy Principles and Guidelines and consultation with DAFF has identified that a beekeeper would not be a sufficiently clear uniform input and could not be used for a levy (see Chapter 7.8.1). 35

50 How much could be collected using the hive-based levy approach? To explore how much money could be collected and feasibility of moving to a hive-based levy, a range of scenarios have been examined (Table 10). The industry suggested, through project consultations, that $1 per hive per annum be collected from all managed bee hives, both commercial and non-commercial. The authors felt it was prudent to explore three hive costing scenarios ($1, $2 and $5 per hive per annum) to provide the industry information to inform decision making on future levy arrangements. The current honey levy collected at point of sale of honey totalled $ (not including the Australian Government s matching funding contribution for R&D) in (DAFF - Levies Revenue Service, 2009). Table 10 Funding that could be collected through a hive-based levy based on data on the number of hives Jurisdiction Number of hives Hive costing scenarios: $1 per hive $2 per hive $5 per hive New South Wales $ $ $ Queensland $ $ $ Western Australia $ $ $ South Australia $ $ $ Tasmania $ $ $ Victoria $ $ $ Northern Territory $1 205 $2 410 $6 025 Australian Total $ $ $ Comparison between existing levy and proposed hive levy scenario^ +$ $ $ Note: Collection costs are not factored into these figures. ACT is not included due to no data being available on the number of beekeepers and number of hives in this jurisdiction. ^ Difference between current collected at 2.3cents per kilo of honey sold equating to $ with total that could be collected for the three scenarios. Source: (ABARE, 2008) How much would collection cost? A key challenge for the industry is how the hive levy would be collected and whether it would be cost effective. The preferred pathway would be to identify existing transactions associated with the hive as an opportunity to collect a levy in an efficient manner. In consultation with industry, it was identified that there was only one common transaction that could be used for levy purposes based around the hive, that being the hive or beekeeper registration required in most states. There appear to be two main collection options worthy of consideration for a hive-based levy: 1. beekeepers directly pay the levy to the Australian Government on an annual basis, and 36

51 2. to utilise the existing transaction, where beekeepers in the majority of states are required to register themselves and declare the number and location of hives with the respective state/territory governments, by adding the hive levy to this transaction. This would mean that states and territory governments would be collecting the levy from beekeepers and passing that levy onto the Australian Government. LRS collection cost charges on the existing levies system works out at 7% of the total collected for honey (much greater for the queenbee levy which is 38% of total collection). The collection costs of LRS, which are largely influenced by the number of levy collection points and frequency of compliance audits, include actual collections and compliance activities, accountability and transparency reporting and providing high quality information and policy advice to the Minister for Agriculture, Fisheries and Forestry and the public (DAFF - Levies Revenue Service, 2009). Option 1 Payment direct to Australian Government There are registered beekeepers who own or manage hives (ABARE, 2008). The first option would require a transaction for each of the registered beekeepers. This represents a significant number of collection points. The number of collection points is considerably greater than the existing honey sales-based levy approach where industry reported that approximately packers would pay the levy on behalf of a significant number of the commercial producers. Producers who sell directly to the public are responsible for paying their own levy, subject of course to meeting the legislated exemption level. LRS indicated that the total number of annual transactions for the existing approach is around 200 (DAFF pers com, 2009). Using the first option of beekeepers paying the hive levy directly to the Australian Government demonstrates that the number of collection points may pose an issue (Table 11). LRS has suggested that the industry could consider a rule of thumb costing approach by adopting an annualised return collection and compliance figure of $60 per return transaction. In the above cost approaches, compliance activities would be confined to a bi-annual audit of beekeepers. If industry required more frequent compliance checks the above cost approaches would vary, and in situations where prosecutions may be required, legal proceedings would place further expense pressures on overall costs. Many in industry reported that they thought $1 per hive per annum would be reasonable, but based on the collection costs using the LRS rule of thumb figure this approach results in the industry making a loss (collection costs equal 104% of total collected). Therefore this is not a viable option to pursue. For a hive levy at $5 per hive per annum the collection costs are approximately 20% of the total collected. 37

52 Table 11 Estimate of collection costs using beekeepers paying directly to Australian Government option Number of Beekeepers in Australia Total cost recovery service fee ($60 per beekeeper transaction) Number of hives 9918 $ $1 per hive per annum Hive costing scenarios $2 per hive per annum $5 per hive per annum Total collected for scenario $ $ $ Collection costs as a percentage of total collected 104% 52% 21% Total collected for industry negative $ $ Comparison between existing levy and proposed hive levy scenario^ negative $ $ ^ Difference between current collected total $ minus current collection costs of and total for each scenario minus collection costs $ Option 2 Payment through State Registrations Let us compare this with the second option, where beekeepers would pay their levy to the state and territory governments who would pass this onto the Australian Government. At this stage, we will put to the side the likelihood of the states and territory governments willingness to participate, and the legalities associated with this option, as we will explore this further below. There is an existing transaction of state registration (for most states) which could be used to collect the levy. It is likely that the state and territory governments would seek a cost recovery service fee for collecting the levy on behalf of the industry. We use an indicative cost recovery service fee of $40 per beekeeper transaction bearing in mind that the government would have to set up processes to manage the collection, ensure transparency and accountability, manage any compliance arrangements, and ensure that any reporting to the public is accurate and timely. To determine an appropriate cost recovery service fee, the authors reviewed existing service fees charged by the different government jurisdictions for state registration of beehives for The service fees ranged from $12.25 in Queensland to $50.40 in Western Australia. Each included different aspects of service from general processing of the registration, accounting and auditing to incorporating compliance and legal issues. The authors identified that $40 was a reasonable estimate to cover the collection and requirements that a state or territory government agency would likely be required to undertake the service. In addition to the fee for service charged by the state and territory governments there likely would be a charge by LRS for their collection and disbursement role in the collections from the state and territory jurisdictions. It is difficult to determine the costs of the collection by LRS for the reduced number of transactions being at least one from each state annually. For this scoping study, we will use a conservative estimate of LRS cost recovery of 1.5% of total collected as provided by DAFF (DAFF pers com, 2009). Table 12 presents estimates of collection costs for a hive levy set at $1, $2 and $5 being 71%, 36% and 15% respectively. 38

53 Table 12 Indicative hive levy revenue and collection costs by State/Territory Jurisdiction Number of Beekeepers Cost recovery service fee per beekeeper transaction $40 Number of hives $1 per hive per annum Hive costing scenarios $2 per hive per annum $5 per hive per annum New South Wales 3062 $ $ $ $ Queensland 3113 $ $ $ $ Western Australia 712 $ $ $ $ South Australia 724 $ $ $ $ Tasmania 157 $ $ $ $ Victoria 2143 $ $ $ $ Northern Territory 7 $ $1 205 $2 410 $6 025 ACT TOTAL 9918 $ $ $ $ Australian Government-LRS Collection costs based on 1.5% collected $8 580 $ $ Total estimated collection costs (Jurisdictions total plus Australian Government) $ $ $ Indicative % of collection costs 71% 36% 15% Comparison between existing levy and proposed hive levy scenario^ -$ $ $ ^ Difference between current collected total $ minus current collection costs of $ and total for each scenario minus collection costs scenario. In examining collection costs for other industries in the LRS Report to Stakeholders , the majority of industries collection costs are below 10% (DAFF - Levies Revenue Service, 2009). It is recommended that a target benchmark for collection costs of 10% or less be considered for any revisions to the honeybee industry levies. Collection Cost Conclusions The scenarios for both collection options demonstrate that a hive levy of $1 would not offer a sufficient prospect for the honeybee industry. Based on collection costs alone, a hive levy approach using either option begins to look viable for the industry at $3 to $5 per hive per annum. Collection costs using a hive-based levy approach have the potential to be high. Beekeepers paying their levy directly to the Australian Government involve a significant number of transactions. Notwithstanding legalities and willingness to participate by state and territory governments, the high number of required transactions under this arrangement cannot be overcome at the state level; even though an existing transaction of hive registration occurs there will still be a cost recovery fee required for each beekeeper transaction. Based on the high collection costs, the industry may wish to examine exemptions for non-commercial beekeepers to redress the impact this has on the overall economics of the proposed hive-based levy. 39

54 Who would pay the levy? The proposal from industry suggested all beekeepers both commercial and non-commercial should pay the levy. Stakeholders consulted as part of this project suggested that they thought it was reasonable to expect all to pay a levy. Some non-commercial beekeeper representatives noted that they would be willing to consider a payment but a sound case would need to be made, and benefits to the non-commercial sector would need to be demonstrated. Currently, a threshold of 600 kilograms per annum applies for the honey levy. Many stakeholders advised that the exemption level was too high and it could easily be exceeded by operators at the lower end of the commercial scale who could thus avoid levy obligations. Many cited an increased incidence of honey sales through farmers markets fostered by changed market dynamics at the higher end where imported honey and blending had altered pricing and returns. It is difficult to quantify the volume of honey being sold through farmers markets, but even if there is a perception of levy avoidance it can create unproductive connotations regarding the levy and its fairness. When raised during consultations, a large number of stakeholders expressed a first preference for a one in, all in approach, however, many conceded that there might need to be some concession below a limit of approximately 5 hives where a flat amount might be required to be paid. Either way, most commercial stakeholders supported the principle that all hives should attract the new levy. What if an exemption were to apply? A threshold of 600 kilograms per annum currently applies for the honey levy. The report authors understand that this exemption was set initially at a level to exclude levy collections from noncommercial beekeepers who in the main were peri-urban operators with very small hive holdings (DAFF pers comm, 2009). Cost of collection and compliance issues were also factored into the exemption level. If we were to consider an exemption for the hive levy, it is instructive to estimate how much might be collected and whether the collection cost constraints could be overcome. As data are available on beekeepers with 50 hives or more, the scenario of people with less than 50 hives being exempt has been used to explore this issue. Table 13 demonstrates that with an exemption of non-commercial sector, a hive-based levy has the potential to collect greater funds for the industry, and that the collection costs are within a range that could be considered as efficient in order to appropriately address the Australian Government s Levy Principles and Guidelines. 40

55 Table 13 Estimate of total collection and collection costs for a hive-based levy if an exemption were to apply Number of beekeepers operating more than 50 hives Number of hives Hive costing scenarios: $1 per hive $2 per hive $5 per hive ,266 Total collected $ $ $ Comparison between existing levy and proposed hive levy scenario^ Collection costs +$ $ $ Using direct payment to Australian Government model (Option 1 of $60 per beekeeper transaction 20% 10% 7% paying directly to the Australian Government) Using payment to states (Option 2 of $40 for each transaction collected by States plus LRS charge) 15% 8% 6% Comparison of total collected minus collection costs Option 1 paying direct to Australian Government -$ $ $ Option 2 paying through state registration systems -$ $ $ ^ Difference between current collected at 2.3cents per kilo of honey sold equating to $ with total that could be collected for the three scenarios. The authors note that if the industry chose to go down the path of a hive-based levy, with an exemption, it would need to identify an appropriate hive number for the exemption. As noted previously, based on average production per hive, a beekeeper would need approximately 12 hives to make the existing exemption level of 600 kilograms of honey per annum. At this point it is prudent to reflect on the fact that one of the principal drivers motivating the industry to explore the hive-based levy was that of fairness of levy payers, due to a perception that the existing system was resulting in free riders benefiting from the levies but not contributing. Going down an exemption pathway may result in difficulties in responding to this industry driver for changes to the existing levy system. How much could an individual business pay? A challenge in this exercise will be to assess what it is reasonable to expect commercial and noncommercial beekeepers to pay per hive per annum. Table 14 illustrates the average indicative payment per business for the different operation sizes using ABARE survey data for the above hive levy scenarios, and also provides an estimate of the average current payments using the honey sales levy approach. 41

56 Table 14 Indicative hive levy payments per business per annum based on ABARE survey data Size of operation Less than 50 hives Hives Hives Hives More than 1000 Hives ABARE data on honey industry Number of beekeepers Average number of hives per operation Average production (kilograms per hive) Indicative average payment per operation for: $1 per hive per annum $2 per hive per annum $5 per hive per annum Existing honey sales levy (2.3c per kilogram of honey) unknown unknown $121 $242 $605 $ $320 $640 $1600 $ $632 $1,264 $3160 $ $1592 $3184 $7960 $2380 The comparison shows that a hive-based levy with a payment exemption level below 50 hives, and attracting an amount of $1, would have beekeepers paying in most cases slightly less than they are currently paying. At $2 per hive, on average businesses would pay approximately 150% of what they currently pay, and for $5 per hive it would be approximately 380% of what is currently paid. The Australian Government Levy Guidelines and Principles state that any new levy, or amendments to existing levies, requires that the industry demonstrate that there is agreement by the majority of potential levy payers. Therefore, it will be important for industry to test how much people will be willing to pay, particularly from the non-commercial sector which will be unfamiliar with paying the levies. What is the willingness and legalities of State and Territory Governments to collect the levy? The strong single message from industry consultation was that it supports a hive levy based on the current state and territory governments compulsory beekeepers registration systems which would deliver: a strong capture point, because a system is already in place and associated charges where applicable are already made at this level for state disease management and control measures, and hive data would be reasonably accurate because registered beekeepers must declare the number of hives they operate. During the consultations with state and territory government agencies, whether there was specific legislation enabling the charging of a hive levy based on declared hive numbers associated with the compulsory beekeeper registration was raised as a critical issue for proceeding with industry s proposed new hive levy. In some states in the past, generic primary industry levy legislation has been in place to facilitate the collection of funds for certain state-based primary industry activities, however over recent times legal and legislative reviews have seen levy collection systems concentrated under Commonwealth law which empowers the Australian Government to deal with issues of excise under the Constitution. 42

57 One particular state agency highlighted the need for proper arrangements for the levy-making bodies (i.e. when exercising statutory powers), and the question of whether the levy bodies or the parent state government department concerned should be responsible for enforcement (i.e. inspection & seizure of records and prosecution) was mentioned as a potential issue that should be factored into any cost recovery formulation for a proposed hive levy. Putting aside the state and territory governments support and the legalities associated with collecting an Australian Government levy through a state-based registration process, a number of other important issues also exist, which were raised during project consultations, namely: issues surrounding privacy of information and the purposes for which it was collected in the first place (i.e. beekeeper registration) could be called into question in terms of its use as a basis for a new levy. DAFF advised there are legal and constitutional constraints that restrict the Australian Government attaching a levy to a state/territory government compulsory registration system (DAFF pers comm., 2009). compliance and accountability requirements that are normally the responsibility of the LRS within DAFF would shift to state and territory governments, and would represent a cost recovery issue for industry to pay. Understatement of hive numbers was commented on by several industry stakeholders as a potential route for levy avoidance as has been observed and reported by industry stakeholders under the current state registration systems. there were suggestions that beekeepers may not register under state systems thus adding to the potential for levy avoidance and higher collection and compliance costs under the proposed new hive levy system. political will to accept responsibility to impose/collect and disburse levy funds could be an issue for states/territories. not all states/territories have compulsory registration, and the existing registrations systems differ (e.g. different registration periods annual, bi-annual; see Section 5.6). Feedback on willingness from state and territory government agencies during consultation in this project suggested that the option of states and territories collecting the levy on behalf of the Australian Government, as part of their registration system, is unlikely to be supported and is therefore not a viable pathway for the industry. What are some other issues that need to be considered? During consultation there were reports that a compulsory levy on hives will inevitably see a contraction in the number of hives declared in operation in Australia. There are examples of understatement of hives that accompanied compulsory beekeeper registrations in the states. Some people during consultation reported a significant number of unregistered hives in operation, mostly from non-commercial sector, but they believed that some commercial beekeepers also understated hive holdings. This report s authors are unaware of the extent and nature of compliance audits under existing state registration systems. A large portion of beekeepers provide their honey to one of the four major packers who pay the honey levy on their behalf. The beekeepers never have the money in their pocket and therefore for many it happens automatically in an out of sight manner. During consultation, it was noted that if beekeepers had to pay the levy themselves, they are likely to be more aware of the payment and therefore may be less positive about making the payment. This could have implications for the amount of levy avoidance that needs to be policed and the significance of understatement of hives. This could also have implications for industry seeking support from beekeepers. Under the Australian Government Levy Principles and Guidelines there is a requirement that the industry demonstrate 43

58 majority support for a change. If producers are being asked to make the payment themselves, they may see it as an additional task that they have to complete in their already busy circumstances. Another issue raised during consultation was from the amateur (or non-commercial) sector which reported very little exposure to the national agenda, and hence an understandable lack of appreciation of the work already being carried out and an even smaller appreciation and understanding of the stated driving needs for change. The case for a new hive levy prepared by industry leadership will require careful consideration of the need to lift the level of understanding and appreciation of the current national agenda covering R&D, biosecurity and residue survey activities. Could a fee be charged per beekeeper? The honeybee industry has reported an urgent need to collect additional funds for biosecurity for the industry. A proposal of collecting $25 per registered beekeeper has been suggested by the industry. This project has not undertaken consultation or analysis specific to this proposal but can make some observations and comments about the proposal based on experience obtained evaluating the feasibility of the proposed hive-based levy. There are several scenarios that could be developed to raise funds for biosecurity for the industry but in considering whether these are useful paths for the industry, the following areas need to be considered for any option: compulsory payment versus voluntary payment collection costs ability to service all who pay purpose of raising funds and how much funds are needed. Compulsory payment versus voluntary payment As noted in Chapter 7.1, the Australian Government Levy Principles and Guidelines state that the imposition of the compulsory levy must be related to clear production inputs, outputs or units of value of production of the industry or some other equitable arrangement. The authors feedback from DAFF during this project suggests that a person, in this case a registered beekeeper, would not be considered to be a clear and fair production input. Based on this feedback, the honeybee industry would need to consider the $25 per beekeeper as a voluntary payment from beekeepers. Collection costs For any funds to be raised by the industry whether through voluntary or compulsory collection the costs of collection need to be included. Collection costs should include financial accounting, administration and transparency, compliance checks and audits and disbursement of the funds to their intended cause. It is useful to look at existing transactions and identify whether the collection could occur as part of that process. For the proposed $25 per beekeeper using a voluntary fee payment there seems to be the intention of using the state and territory government registration systems. The authors consultation with state and territory government representatives on the hive-based proposal suggests that attaching a cost per beekeeper would be similar to a hive charge. The difference with this proposal is that industry would be asking the state and territory governments to do 44

59 it for them rather than the Australian Government. This would mean the Constitutional and legal constraints between the Australian Government and the state and territory governments would be overcome. However, each state and territory government would need to be provided a case for them to collect the funds for the industry. This could be a challenging and time consuming process to get all states/territory governments to agree, particularly when the registration systems for each state/ territory differ with some states charging their own registration fee and others reporting that they have no intentions for charging a fee. An alternative could be to get state beekeeper associations to collect the funds from each registered beekeeper and pass onto AHBIC for biosecurity purposes. The industry propose a $25 per beekeeper fee be charged and that this would raise them $ It should be noted that this does not included any costs of collection and therefore it is a risk to be used as the amount that would be generated for the industry based on this fee. Ability to service all who pay The authors understanding is that the intention is to collect a fee from participants in the industry who do not currently pay the existing levies. Based on consultations for the hive-based levy, the noncommercial beekeepers report that they think it would be reasonable for them to pay some fee for industry benefits, such as biosecurity, but they would need to be serviced and their needs accommodated. This requires a well presented plan and communication with the people who the industry is seeking payment from and should not be considered as an afterthought. These people will not support any payment whether voluntary or compulsory if they do not feel their needs are going to be considered adequately. Based on our feedback during consultations in this project this does not appear to be adequately addressed at this stage. Purpose of raising funds and how much funds are required The industry report that a $25 per registered beekeeper would raise approximately $ which they note may be sufficient for their biosecurity purposes. It should be acknowledged that this fee does not include any collection costs. However, the industry states that they believe it should be sufficient to meet their biosecurity needs. The current biosecurity needs are not clear and therefore it is difficult to comment whether their desired amount is sufficient. This project has identified a need for a more fundamental review of the industry s biosecurity situation. The issue that needs to be addressed is why the existing biosecurity levy is not being used by the industry to respond to current biosecurity issues and if the existing revenue is not sufficient whether the industry participants should be paying additional to meet this increasing need. 45

60 8. Implications This section examines the implications of the findings, consultations and analyses in this study against the terms of reference. It firstly analyses the hive-based levy in terms of its settings and deliverables, then investigates whether the hive-based approach is likely to better satisfy the drivers that have motivated the industry to seek a review of levy arrangements. A comparison between existing honey levy and the proposed hive-based levy option is explored. Finally, the hive-based proposal is assessed against the Australian Government s Levy Principles and Guidelines and any actions required for industry to pursue the hive-based path are noted. Summary of hive-based approach The analysis suggests that a hive-based levy has the potential to benefit the honeybee industry and is an opportunity for securing greater resources if the industry were to consider a hive levy of between $2 and $5 per hive per year. Collection and compliance costs are significant for the scenario under which all commercial and noncommercial beekeepers pay the levy. These costs are likely to require the industry to have to consider an exemption level as a way to reduce collection costs, as is the case with the existing system. A key issue for the honeybee industry will be how much beekeepers will be willing to pay in any new levy, as the industry will need to canvas their support and hold a successful ballot if they are to succeed in changing the levy approach for the industry. Table 15 provides a summary of the key issues and conclusions for the hive-based levy approach. 46

61 Table 15 Summary of assessment of hive-based levy for the honeybee industry Key question Can a levy be attached to a hive? How much could be collected? How much would collection cost? Is the preferred industry collection option of state and territory governments collecting the levy as part of existing registration systems feasible? Who would pay the levy? How much would an individual pay in comparison to the existing approach? What if an exemption were to apply? Assessment and key issues Yes, a hive is a possible input that can be used for a levy. It provides scope for the honeybee industry levy to be sourced. The hive-based levy system has the potential to collect significant resources. At $1 per hive approximately $ more would be collected than the current approach (excluding costs of collection). For scenarios of a hive levy of $2 and $5, greater amounts could be collected of nearly $ and over $2 million more respectively (excluding costs of collection). This is an issue for the hive-based levy approach as a significant number of transactions would be required for both collection options explored viz, 1) beekeepers paying directly to the Australian Government, or 2) beekeepers paying to the state and territory governments as part of existing registration processes. Both options had significant collection costs. Existing collection costs are 7% of total collected for honey (and much greater for the queenbee levy for which costs are 38% of total collection). The authors recommend the industry consider a benchmark goal of 10% or less for collection costs for any levy arrangement to ensure the approach is efficient. Under the Australian Government collection option for a $1 per hive scenario, the industry would make a loss, as the collection costs would equate to more than the amount that would actually be collected, making this scenario nonviable. At $2 per hive, approximately $ more would be collected than the current levy revenue. At $5 per hive, over $1.8 million more than funds from the existing levy would be collected. Using the state collection approach again the $1 per hive base would not be workable as the industry would make a loss. For $2 per hive, approximately $ more would be generated than current collections and for $5 per hive nearly $2 million more would be collected. No. All government stakeholders reported that this would be difficult to achieve and highly unlikely to occur. There are legal and constitutional constraints that make this pathway not feasible. It would take a considerable amount of work for the industry to prove to governments that this approach would work and significant legal counsel would be required. The hive levy option provides the opportunity for all industry participants, both commercial and non-commercial, to participate in paying the levy. A hive levy of $1 per hive would result in people paying in most cases slightly less than they are currently paying. For the $2 per levy scenario, on average a business would pay approximately 150% of what they currently pay, and for $5 per hive it would be approximately 380% of what is currently paid. How much beekeepers are willing to pay will be an important consideration when setting the levy. Benefits of the levy will need to be demonstrated to beekeepers to help determine how much they would be willing to pay. Costs of collection and compliance will ultimately determine where any exemption needs to stand. It should be noted that the existing levy exemption level of 600 kilograms of honey was determined to exclude peri-urban and non-commercial beekeepers, partially as a way to reduce collection and compliance costs. The collection cost scenarios demonstrate that an exemption may be a positive pathway for the industry to follow as it significantly reduces collection and 47

62 Key question Other issues worthy of consideration Assessment and key issues compliance costs, but maintains potential to increase revenue collection. Scenarios which apply an exemption for beekeepers with less than 50 hives demonstrate that the industry could consider a minimum of $2 per hive, as this would provide industry additional resources (approximately $ more for both Australian Government and state/territory government collection options). There is likely to be understatement of hives that would occur based on state experiences. Addressing the drivers motivating industry to change levy arrangements The main driver for a changed levy consistently reported during consultations was the need to secure funding for the peak industry body, AHBIC. Under the existing guidelines, the Australian Government would not entertain setting up a compulsory levy to resource an industry peak body, regardless of the levy approach that was used. Feedback provided during the project s consultations identified that the motivation to make a change to a hive-based levy would be seriously diminished if it could not help the industry respond to its own internal funding issues. The second motivation for a new hive levy mentioned consistently during consultations was the need to increase resources for biosecurity and avoid claimed free riders who benefit from levies but who do not contribute to them. In looking at the implications of these issues, a comparative assessment was made of the existing levy approach and the proposed new hive levy. The need for more funding for biosecurity seems a compelling requirement, particularly in light of the consistent feedback from commercial industry stakeholders, and for that matter, non-commercial stakeholders, that biosecurity issues represent a major priority for industry. Notwithstanding this, and based on information provided to the authors of this report, there is no information about how much funding is needed, what the money might be used for and who would undertake the funded activities. For changes to levy arrangements to be pursued with the Australian Government, a plan of action for preventative and responsive biosecurity would be essential. AHBIC reported that a plan was being developed but it was not available at the time of completion of this report. While the analysis determined that there would be no major difference between the two levy approaches (i.e., existing honey sales approach and hive-based approach) in terms of the use of the levy funds, there were some intimations by industry that suggested EADR Levy Contingency Funds could be used to reimburse AHBIC for its biosecurity input. Caution on how this is undertaken must be stressed. The authors of the report understand there is nothing precluding AHBIC from being a service provider for the Contingency Fund, but as they are a major player in the funding decisionmaking process for the Contingency Fund, sound governance and transparency protocols will need to be observed to demonstrate that AHBIC is best placed to deliver the services for biosecurity on behalf of the industry. A key point of difference between the two levy approaches is that funding could be generated from a wider base using the proposed hive-based approach. However both levy approaches could generate more funding than is currently being collected if this is the main driver for industry. For example, the dollar amount per kilogram of honey sold could be increased if required using the existing system (although it should be noted that a change in this area would also require a formal proposal to the Australian Government that addressed the Levy Principles and Guidelines). Alternatively, the industry could investigate reducing or removing the existing exemption level to generate additional funds and improve fairness. Caution should be taken in using this path as collection costs for beekeepers selling less than 600 kilograms of honey per annum would need to be factored into any decision for change. For the hive-based levy, the total dollar amount per hive could be determined by the industry. 48

63 Consultation with industry identified that the industry is not proposing to change the purpose or distribution of the collected levy between the three existing purposes R&D, Emergency Animal Disease Response and National Residue Survey. The levies would be 65% for R&D, 30% Emergency Animal Disease Response and 4% to National Residue Survey. It is important to note that a limiting factor for the R&D matching contribution from the Australian Government is that the matching component is capped at 0.5% of GVP. Without a biosecurity action plan, as noted previously, and information on how much additional funding is required it is difficult to assess which levy approach may work more effectively for the industry. The authors question whether the recent levy distribution changes between the EADR and NRS components will provide sufficient resources for the industry for biosecurity purposes. A hive-based levy approach starts to look worthwhile, in terms of funds generated, at greater than $3 per hive. Therefore, if the key purpose is raising more funding, a hive-based levy approach may be an option, although it is likely to require significant initial communication with beekeepers to obtain support. A communications exercise would need to be resourced by the industry. The issues surrounding fairness of levy paying, and the possible leakage that is occurring through honey sales at farmers markets and other direct sale opportunities, do appear to be growing concerns for industry. Even if these issues are perceptions, there is value in more information being obtained on the volume of honey being sold directly via farmers markets, and the attributes of the beekeepers who are selling honey through this avenue. Perhaps an examination could be made into the effects of reducing or removing the current threshold of 600 kilograms of honey sold per annum by having all beekeepers that make a commercial gain from the sale of honey required to pay the honey levy. This may not resolve all reported issues of fairness as it still would not include hobby or purely non-commercial beekeepers who, some in industry report, have the potential to be a substantial biosecurity risk. An investigation would need to occur into how many beekeepers make a commercial gain from honey, the likely additional funding that could be collected, and the associated collection costs that this path may present. To undertake this investigation successfully the industry should consider a study which complements the ABARE Honeybee Industry Survey with the aim being to achieve a better understanding of the 8206 beekeepers who have less than 50 hives. This information would not only be useful for the industry to make a decision on whether reducing or removing the current threshold might be a viable pathway, but would also provide the industry with information on the needs of this group and ways to service them. This information could prove extremely beneficial for investment of future levy funds if there were to be a greater pool of contributors. The authors of this report respect the view of the need to include hobby and non-commercial beekeepers in the levy system, but observations of what has occurred in other industry sectors suggest that it could be difficult to sell its practicalities to the Australian Government and that there may be a need for these people to be excluded for a successful establishment of a hive-based levy. How does the hive-based levy address the Australian Government Levy principles and Guidelines? This section provides a summary of the hive-based levy proposal against the Australian Government s Levy Principles and Guidelines that would need to be addressed for any new, or amendment to, existing levy arrangements. Feedback from the DAFF suggests that a hive-based levy proposal would need to be prepared as if it were a completely new levy, as the changes are significant (DAFF pers comm., 2009). 49

64 Is there a significant market failure in the industry to warrant a change to the existing levies structure? Where market failure exists government may intervene to ensure the net benefits for industry and the community are met. With the current honey levy in place, the case has already been agreed by the Australian Government that market failure exists for industry R&D and biosecurity resourcing. A move to a hive levy system should be able to restate the case as for the existing honey levy. For a case to change the existing levies structure, the industry would need to undertake further work on why the existing system could not address their issues and future requirements. As stated above, the primary driver for change reported by the industry was the need to secure resources for their industry peak body. This aspect will not meet the market failure requirements as defined in the Levy Principles and Guidelines. The industry may see it as a market failure from their perspective, but the government will not pursue setting up a long term compulsory approach for addressing the funding security need, as it is a key principle that an individual business should have a choice as to whether it becomes a member of an industry body. There is emphasis on not adding to a business compliance and regulatory costs through compulsory legislative payments, which can be seen across all industry sectors, not only agriculture. There may be scope to seek short-term support, in the form of a grant, to help the industry improve its positioning to demonstrate to beekeepers the value of being a member of the industry body, however under current circumstances and financial constraints this may be optimistic. Acknowledging increased biosecurity needs as a driver for levy change, the honeybee industry would need to document an operational plan for biosecurity to support any case for a new levy. This plan should include what activities are proposed to be undertaken for biosecurity and how much these will cost. This plan would form the basis of how much additional funding the industry believes it needs to address their biosecurity issues, which forms a large part of their case for changing the levy. Without a well-documented plan, the authors believe that the government will not be supportive of a change to the existing system, especially given that they have recently approved amendments to the levy distribution between the EADR and NRS components. Does the proposed levy have majority support from potential levy payers? Gaining majority support from industry represents one of the most significant aspects for any case to introduce or materially change a statutory levy. AHBIC must develop an extensive communications plan to reach out to the industry, which by any judgement is a diverse primary industry made up of a large number of beekeepers operating in commercial and non-commercial capacities. This task cannot be understated in terms of importance and difficulty. It was reported during consultation that AHBIC state members had voted on the issue at their respective annual general meetings and that they were supportive of the proposed change. Feedback the authors received during consultation suggested that this may not tell the whole story as there are a significant number of people that have reservations on the proposal; in fact, most were unsure of what the proposal would entail, and therefore were not sure if they agreed or disagreed. Granted this is one of the roles of this project and this report could be used to help industry to determine its preferred path forward. It should be noted that the sign of support from AHBIC member bodies through their annual general meetings will not constitute a vote of potential industry levy payers. The non-commercial sector, which is currently not contributing to the levy, will require significant consultation to help them to understand what is being proposed and how it would benefit. The sector is not currently familiar with the levy system as compared to the commercial sector, which is already paying the levy. 50

65 The hive-based levy approach (with an exemption below 50 hives) looks viable at greater than $2 per hive, and based on estimates this would result in an average business paying approximately 150% more than what they currently pay. It would also require a significant number of additional people to pay the levy. It is expected that this could create dissent from existing levy payers who will not see value in increasing their levy. Based on recent levy communications and a ballot exercise by the Australian banana industry for a new statutory levy, a communication campaign in the order of $100,000 would be required for the honeybee industry to communicate the proposal to potential levy payers and then to carry out an independent vote. Has there been a reasonable attempt to inform all potential levy payers of the proposal and allow them to comment? Once again, this task will have to be tasked by AHBIC which must develop an extensive discussion covering all aspects of the case for and against a new levy system, and in doing so, prepare for an extensive consultation plan for all sections of the honeybee industry, both commercial and noncommercial. DAFF indicate that major levy changes, which this current exercise represents, would require an independent industry ballot. The ballot is required to be undertaken at a cost to the industry. Has the initiator of the levy proposal provided an analysis of any arguments opposing a levy? This would need to be considered when developing a plan to communicate with beekeepers to be included in a future hive levy. Any issues that emerge during the consultations would need to be documented along with counter-arguments for future reference. Our experience suggests that it is better to document all issues surrounding any opposition to the levy and at the same time offering positive solutions for matters arising. Is there an estimate of how much levy would be raised, a clear plan of how it would be utilised and the way(s) it would benefit levy payers? Any major levy change needs a clear and unambiguous plan for the proposed changes and how funds raised will be expended. This project aims to help the industry to determine its path forward if they were to pursue a hive-based levy. What has not been evident in this project has been a clear understanding of what the proposed hive levy meant, how much it would generate and to what specific purpose it is intended the funding be applied. As noted above, a plan for biosecurity activities and any other aspects of the purpose of the levy funds is required. As this proposal aims to change existing arrangements there will be a need to document why the proposed revised arrangements will better meet the industry need. Is there majority support on the levy imposition and collection mechanism, or demonstration that the mechanism is equitable? An industry ballot which follows the consultation process is one of the most challenging aspects of the proposed change for a levy. Government will require a full industry ballot where the proposed changes are significant. The proposed change to a hive levy represents a major change. The Australian banana industry recently faced two industry-wide ballots covering over 800 banana growers in three states and the NT. Consultation costs were in the order of $120,000 for both ballot processes with another approximately $50,000 for legal and conducting the ballot processes (Australian Banana Growers Council, 2009). 51

66 Is the levy imposition equitable between levy payers? This is one of the main drivers that the industry has presented to justify a change to the existing levy arrangements. It is difficult to document how many free riders exist in the system. The hive-based approach does provide the opportunity for a wider contributor pool and without any exemptions could help to address this issue, even if it were a perception. However, there will be a challenge for the industry to demonstrate greater fairness in the proposed system without more information on the 85% of beekeepers who are considered non-commercial. Perhaps the industry could get value out of trying to understand this sector, their needs and how a levy system could be beneficial in their view. If an exemption level has to be introduced to help the industry address the high collection and compliance costs this may dilute the equity issue. This could prove challenging for the industry. Is the levy imposition related to the inputs, outputs or value of production of the industry? A hive levy offers a reasonably uniform basis for levy production thus has the potential to facilitate the industry goal for a fairer levy where all industry can contribute to services that will benefit both the commercial and non-commercial sectors. Is the levy collection system efficient and practical, and does it impose minimal red tape for business? The current honey system offers a fairly low red tape option in that there are relatively few collection points where levy returns are embedded into the accounting practices and systems of honey packers and marketers. This will be a major issue for the proposed hive-based levy approach as there will be many more collection points, being individual beekeepers, who have to prepare and submit appropriate paperwork. AHBIC will need to demonstrate an industry acceptance that this does not represent an unreasonable red tape pathway. Has the body to manage levy monies been consulted and is that body accountable to levy payers and Government? The proposed approach will not change the bodies that will be used to manage the levy funding. While there is no substantive change to the prime purpose for which the current honey levy is imposed any increased funding outcomes under a new hive levy will require a clear statement of purpose and intended expenditure. Industry consultations will be required with RIRDC who administer the R&D program, AHA who administer the EADR Levy and DAFF who administer the NRS Levy to satisfy this principle. The only issue that may arise from this is that the stakeholder base will have widened, which may require accountable bodies to amend their priorities and programs to ensure all beekeeping stakeholders benefit from the levies. For example, would the non-commercial sector, which no doubt has some different R&D priorities to the commercial sector, need to be accommodated within RIRDC s Honeybee R&D 5-Year Plan? Does the industry have a plan to review the levy against the Levy Principles and Guidelines? This principle will see industry having to undertake a formal review of performance of the new levy and its outlays at some period of time after imposition of a hive levy. The plan for review should be 52

67 documented in the proposal. Consultation with RIRDC, AHA and DAFF as administrators of the levies would need to be consulted on proposed review plan. 53

68 9. Recommendations AHBIC has proposed an investigation into the current honey and queenbee levies to be replaced by a unified hive-based levy. It is proposed to apply a new levy to all beekeepers in Australia, both commercial and non-commercial, for each managed beehive. The purpose of the levy would remain support for R&D, biosecurity and national residue testing. The honeybee industry presented three issues as key drivers motivating them to seek changes to their existing legislated levy arrangements: 1. Obtaining consistent resourcing and funding security for industry peak body, AHBIC; 2. Increasing funding to support the industry s response to significant biosecurity threats and its ability to fund such responses, and 3. Improving fairness and equity of people required to pay the levies. Following completion of a desktop analysis and consultation with industry the following recommendations are provided: 1) There is potential to increase funding for biosecurity for the industry using either the existing levy approach on sales of honey or through a hive-based levy. Should an increase in funding be pursued, it is recommended that the industry develop a clear plan for biosecurity which includes tasks, costs and how the industry would benefit from these actions. This plan would provide a guide to the level of additional resources required. 2) The hive levy has the potential to widen the base of people contributing to the levy, which could help the industry deal with the fairness claims or perceptions. The challenge for the hive-based levy is identifying an efficient collection approach as the costs are high due to the number of transactions that would be required: a. Collection arrangements for the hive-based levy are problematic. Collection through state and territory government registration processes may seem practical at first glance, but it is unlikely to be supported by those governments due to legal and Constitutional constraints. It is recommended that if the industry seeks to pursue a hive-based levy it consider beekeepers paying directly to the Australian Government. b. It is recommended that a small study occur into understanding the non-commercial beekeeping sector. If the industry is to pursue the hive-based levy pathway then understanding their needs and wants and the way they operate will position the industry to service them into the future. A study that complements the ABARE survey targeting the non-commercial sector would be useful. It should seek to try to identify the volume of honey being sold through farmers markets and any likely future trends in this area. It could then inform where an exemption level might apply without impacting on fairness issues. This study could help the industry to demonstrate to the Australian Government that the current system needs to be improved, and would be valuable to any proposal for changing the levy approach. 3) A hive-based levy approach has the potential to provide the industry with benefits through funds being obtained from a wider base. It is recommended that the hive levy should be at least $2 per hive, but probably to make it worth the industry s while when factoring in the set-up costs, a minimum of $3 per hive should be considered. a. It is recommended that the industry undertake preliminary enquiries as to whether $3 per hive is likely to be supported by the majority of the industry. 54

69 b. If $3 per hive seems to be supported, it is recommended that the industry undertake significant communication and consultation with beekeepers, both commercial and noncommercial, to promote the purpose and benefits of the levy and to gauge how much individual beekeepers would be willing to pay. Following this consultation, a ballot would need to be held to document the support of the industry for the changed levy approach. 55

70 Appendix List of people consulted as part of this project 56

71 Who AHBIC M ship Industry Ass n Govt/ R&D Agency Commercial producer Non commercial producer Alex Schapp Tasmanian Department of Primary Industries and Water Biosecurity and Product Integrity Alicia Glenn Legislation and Policy Officer, Levies Revenue Service, DAFF Andrew Shugg NT Beekeepers Barry Pobke President, South Australian Apiarists' Association Bill Trend Senior Apiculturist, Department of Agriculture WA Bill Weiss President, New South Wales Apiarists' Association (Inc) Bill Winner Capilano Honey Ltd Daryl Connelly Tasmanian Beekeeper's Association Dave Leyland WA Farmers Federation, Beekeepers Section Perth WA Dave Wilson Amateur Beekeepers Association Inc Beecroft (NSW) David Dall (Dr) Senior Research Manager, RIRDC Debra Grull Tasmanian Department of Primary Industries and Water Des Cannon Chair, RIRDC Honeybee R&D Advisory Committee Des Willmot National Association of Crop Pollination Associations: (Sec) Doug Somerville Technical Specialist (Apiculture) NSW Department of Primary Industries Eduard Planken Principal, Wescobee Ltd, Also Deputy Chair AHBIC Chair - WA Farmers Federation 57

72 Who AHBIC M ship Industry Ass n Govt/ R&D Agency Commercial producer Non commercial producer (Inc) Beekeepers Section Eva-Maria Bernoth Manager Veterinary Services, Animal Health Australia George Pallot Vice President, Ipswich & West Moreton Beekeepers Assn Harold Brown Manager, Legislation and Cabinet Liaison Strategic Policy Queensland Primary Industries and Fisheries, Department of Employment, Economic Development and Innovation Ian Denney Director Programs, Animal Health Australia Joe Riordan Apiary Inspector Department of Primary Industries Julian Wolfhagen President, Tasmanian Beekeeper's Association Julie Lockhart New South Wales Apiarists' Association (Inc) Karen Skelton Principal Veterinary Officer (Animal Health Surveillance) Biosecurity Queensland, Queensland Primary Industries & Fisheries, Department of Employment, Economic Development & Innovation Ken Beer Northside Beekeepers Assoc Inc Kerrin Williams Victoria Apiarists Assn Kevin G. Webb Honey Packers & Marketers Associations (Inc): Secretary: Spring Gully Pickles Pty Ltd Lindsay Bourke Chairman, AHBIC, Australian Honey Products Pty. Ltd. Trading as Cradle Mountain Honey & Taverner's Honey Lucy Radzikowska Executive Officer, WA Farmers Federation (Inc) Beekeepers Section Michael Stedman 58

73 Who AHBIC M ship Industry Ass n Govt/ R&D Agency Commercial producer Non commercial producer Senior Apiary Inspector Apiculture Dept of Primary Industries and Resources of South Australia Mike McDonald Senior Policy Officer. Horticulture Policy Crops, Horticulture, Irrigation and Wine Branch Agricultural Productivity Division. DAFF Mike Willoughby Animal Health Australia Noela Geeves Ipswich & West Moreton Beekeepers Assn Paula Dewar Australian Queen Bee Breeders Association Peter Clark Sunshine Coast Amateur Beekeepers Group Peter Detchon West Australian Beekeepers Association Inc. Peter Marvell North Shore Beekeepers Assoc (Inc) R.D. Johnson Queensland Beekeepers Association Inc Rod Andrewartha (Dr) Chief Veterinary Officer, Tasmanian Department of Primary Industries and Water Biosecurity and Product Integrity Ross Adams Policy Officer, Animal and Plant Health Policy, DAFF Stephen Ware Executive Director, Australian Honey Bee Industry Council Sue Fitzpatrick (Dr) Dept of Regional Development, Primary Industry, Fisheries and Resources Darwin NT Trevor Weatherhead President, Queensland Beekeepers Association Inc Warwick Lee Principal Policy Officer, Animal Industry Policy & Investment, Industry Development and Trade, Queensland Primary Industries and Fisheries, Department of Employment, Economic Development & Innovation Wayne Ridley 59

74 Who AHBIC M ship Industry Ass n Govt/ R&D Agency Commercial producer Non commercial producer Chairman, WA Beekeepers Association Inc. Wendy Thiele South Australian Apiarists' Association 60

75 References Animal Health Australia (2009), AUSVETPLAN - Disease Strategy Bee diseases and pests. Australian Government, Canberra Australian Banana Growers Council (2009 September) pers comms Australian Bureau of Agricultural and Resource Economics (2008), Australian Honeybee Industry Survey Canberra: RIRDC. Australian Bureau of Agricultural and Resource Economics (2010), Australian Commodities, Vol 17 (1), March Quarter Australian Honey Bee Industry Council (AHBIC), (2009) 2009 AHBIC Chairman s Report Australian Honey Bee Industry Council, Australian Honey Bee Industry Council Constitution The Australian Horticultural Corporation, Effectiveness in Increasing International Competitiveness Report No June 1992 Beekeepers Association of ACT, ACT - Beekeepers Association of ACT. Retrieved September 25, 2009, from Beekeepers' Association of ACT: Benecke, F. S. (2007), Commercial Beekeeping in Australia, Rural Industries Research and Development Corporation, Canberra. Briggs, Linton (2008), Australian Honey Bee Industry Council -Funding Crisis Discussion Paper Australia's Honeybee News July/August 2008 Bureau of Agricultural Economics, A report based on the BAE submission to the IAC inquiry of September 1983, BAE Canberra Project 24303,Occasional Paper No. 88 Cannon, D. (2009, October). pers comm, Canberra. Centre for International Economics (2005), Future Directions for the Australian Honeybee Industry Department of Agriculture, Fisheries and Forestry, Canberra Centre for International Economics (2005), Strengthening the Industry Partnerships Program, report prepared for Department of Agriculture, Fisheries and Forestry, Canberra Coster, M., & Kennan, N (2005), New Generation' Farmers' Markets in Rural Communities. Rural Industries Research and Development Corporation, Canberra Commonwealth Scientific and Industrial Research Organisation (CSIRO); (2008), Submission to the inquiry into the future development of the Australian honeybee industry House of Representatives Standing Committee on Primary Industries and Resources; Report prepared for Australian Government. Department of Agriculture, Fisheries and Forestry (2007), Levy Principles and Guidelines, Commonwealth of Australia, Canberra. Department of Agriculture, Fisheries and Forestry - Levies Revenue Service (2009), Business Plan and Report to Stakeholders Australian Government, Canberra Department of Agriculture, Fisheries and Forestry - Levies Revenue Service (2009), Information on Honey Levy & Export charge Fact Sheet. 61

76 Department of Agriculture, Fisheries and Forestry - Levies Revenue Service (2007), Levy Principles and Guidelines Australian Government, Canberra DAFF. (2009). National Residue Survey. Retrieved from DAFF: Department of Agriculture, Fisheries and Forestry - Levies Revenue Service (2009), Nursery Products Levies Fact Sheet Department of Agriculture, Fisheries and Forestry - Levies Revenue Service (2009) Fact Sheet on Mushroom Industry Levy. Government and Livestock Industry Cost Sharing Deed in Respect of Emergency Animal Disease Responses (Variation 2009). House of Representatives Standing Committee on Primary Industries and Resources. (May 2008). Report of the inquiry into the future development of the Honeybee industry. The Parliament of Australia Canberra Fitzpatrick, Sue (2009, September) pers comm NSW (2007)- NSW Apiaries Act 1985 a guide to the main sections PRIMEFACT 245 June NT (2009) Northern Territory Department of Primary Industry flyer notifying compulsory registration of beehives Issued August 2009 QLD (2008) Guidelines for Rural Beekeeping in Queensland Compiled by Hamish Lamb Apiary Officer Queensland Primary Industries and Fisheries Department of Employment, Economic Development and Innovation, Brisbane Parliament of Australia. (1999). Primary Industries and Energies Research and Development Act. Parliament of Australia, Canberra Phillip Fox Lawyers (2009) Government and Livestock Industry Cost Sharing Deed in Respect of Emergency Animal Disease Responses- Variation Rural Industries Research and Development Corporation (2008), Annual Report Rural Industries Research and Development Corporation (2007), Honeybee R&D Plan RIRDC Canberra. SA(2009) Primary Industries and Resources SA (PIRSA) : State Trading: Notification Pursuant to Article XV111:4(a) General Agreement on Tariffs and Trade 21 January 1970 TAS (2009) The Department of Primary Industries, Parks, Water and Environment (DPIPWE): VIC (2009) Beekeeping and the Livestock Disease Control Act 1994 Note number : AG 1100 Updated: April 2009 WA (2009) Department of Agriculture and Food WA: 62

77 A Hive-based Levy for the Honeybee Industry Scoping study assessing the suitability and feasibility of an alternative honeybee levy approach by Robert G. Granger and Vicki L. Woodburn Publication No. 10/143 The honeybee industry currently enjoys the benefits of compulsory legislated levies for research and development, managing emergency animal disease threats and supporting residue testing services for honey. These levies help the honeybee industry to maintain and improve its productivity and profitability. The industry currently pays levies on sales of honey and queenbees. In the interest of continuous improvement, and trying to keep the honeybee industry as productive, profitable and sustainable as possible, the peak body for the industry, the Australian Honey Bee Industry Council, has proposed that an investigation occur into whether there would be benefits in replacing the existing levies with a unified hive-based levy paid by all beekeepers. RIRDC is a partnership between government and industry to invest in R&D for more productive and sustainable rural industries. We invest in new and emerging rural industries, a suite of established rural industries and national rural issues. Most of the information we produce can be downloaded for free or purchased from our website < RIRDC books can also be purchased by phoning for a local call fee. Most RIRDC publications can be viewed and purchased at our website: Contact RIRDC: Level 2 15 National Circuit Barton ACT 2600 PO Box 4776 Kingston ACT 2604 Ph: Fax: rirdc@rirdc.gov.au web: Bookshop: RIRDCInnovation for rural Australia