Proposed ‘Biosecurity Protection Levy’ to be imposed on Australian farmers and other primary producers
Joe Lederman (FoodLegal Managing Principal) and John Thisgaard (FoodLegal
© Lawmedia Pty Ltd, October 2023
On 9 May 2023, the Australian Federal
Government announced it would introduce a ‘Biosecurity Protection Levy’ (BPL)
payable by Australian farmers and primary producers. In September 2023, the
Australian Department of Agriculture, Fisheries and Forestry released a draft
of the proposed BPL.
This article explores the likely impacts, and
questions whether farmers actually are the persons deriving all the so-called
additional benefits that the Federal Government asserts are derived from the
programs to be funded by the levy.
Is this really a legitimate case for
government to utilise the ‘user-pay’ principle to add extra costs on farmers
and food production?
Is this not another illustration of a debt-laden
government feeding the price inflation genie by imposing extra taxes on
production, compounded by the Reserve Bank of Australia adding to the bills by imposing
higher borrowing costs on the private sector and economic production? The
answers appear to be self-evident.
Features of the proposed BPL
The Australian Federal Government announcement
on 9 May 2023 said that the introduction of a Biosecurity Protection Levy (BPL)
was necessary to ‘raise additional funds to enhance Australia’s Biosecurity
measures’. The Government asserts that the levy will ensure that ‘the
industries that benefit most from Australia’s Biosecurity system contribute to
the full cost of Biosecurity’.
The proposed BPL will impose a levy on
Australian producers of agricultural, forestry and fishery products. The
proposed BPL aims to collect approximately $50 million per year, which will
cover 6% of the Commonwealth’s projected Biosecurity funding for 2024-2025. The
remainder of Australia’s biosecurity funding comes from fees and charges on
importers, as well as general taxation revenue.
The proposed Biosecurity Protection Levy would apply from 1 July 2024 and would include:
· New charges for importers of low-value imports
· New charges on domestic producers regardless of their export status.
The Australian Department of Agriculture,
Fisheries and Forestry (DAFF) has released a consultation paper on the
BPL and is accepting submissions from industry with respect to the proposed
design of the BPL until 13 October 2023.
What does this mean for primary producers?
Many primary producers are already required to
pay agricultural levies to DAFF as part of an arrangement between industry and
DAFF to collectively pool and distribute funds for purposes including research
and development, marketing and residue testing. These existing levies are
imposed under federal legislation including the Primary Industries (Customs)
Charges Act 1999 and Primary Industries Levies and Charges Collection
The BPL would apply separately from and in
addition to the other levies collected under the above arrangements. The
Government says the funds paid under the BPL would be collected by DAFF and ‘used
exclusively for biosecurity management’.
The proposed BPL will apply at a rate equivalent to 10% of the 2020-2021 agricultural levies paid by industry. DAFF has provided its own estimates of the costs for primary producers, but industry representatives have not had definitive input into these government calculations:
· A grass-fed cattle producer will pay an extra 50c per head of cattle.
· Egg producers will pay an extra 3.25c per chick.
· Honey producers will pay an extra 0.46c per kg of honey.
Cotton producers will pay an extra 22.5c per
227kg bale of cotton.
DAFF is seeking comments on the following issues:
· Which businesses would be defined as a ‘producer’ for the purposes of the BPL. Daff currently anticipates that the BPL will generally apply to primary producers that are already required to pay agricultural levies under existing legislation, regardless of whether these producers export product.
· The levy rate, noting that some commodities are not subject to existing agricultural levies but producers of these commodities may still be required to pay the BPL.
· Whether there should be any thresholds or exemptions.
· How (and how often) the levy should be collected. DAFF has suggested an annual collection.
· Information that would be helpful for industry
to understand whether the levy is proportionate to biosecurity benefits.
Australia’s biosecurity programs
As identified above, the money raised by the proposed BPL is intended to directly fund Australia’s biosecurity programs. Australian biosecurity measures are intended to minimise the risk of threats to the Australian ecosystem and are primarily governed under the federal Biosecurity Act and associated regulations. They include the following programs:
· Imported foods are subject to import biosecurity conditions located on the BICON website. Import conditions are set according to product type and the level of biosecurity risk it presents, and can include:
o A requirement to obtain an import permit;
o Documentation requirements such as a Health Certificate, Manufacturer’s Declaration or other Certificate issued by a relevant government authority of the exporting country;
o Processing requirements (e.g. a requirement that products be heat treated); and
o Prohibitions and restrictions on the importation of certain types of foods from specified countries (e.g. dairy products cannot be imported from a country that is not recognised as being free from Foot and Mouth Disease and Lumpy Skin Disease).
· Other imported items (e.g. plant material or live animals) are subject to biosecurity controls which can include inspection, treatment and quarantine.
· DAFF monitors biosecurity threats within
Australia and oversees the Australian Government Biosecurity and Agricultural
Response Plan to respond to an emergency outbreak.
Australian States and Territories also each
implement their own local biosecurity programs and frameworks. Money raised
through the BPL will not be used to fund these programs.
Potential implications arising from the BPL
If adopted in its proposed form, the BPL would
introduce a new cost on Australian primary producers, regardless of whether
they also import or export product from Australia. Aside from existing
agricultural levies, primary producers already invest significant amounts into
minimising biosecurity risks for their own properties and products (e.g.
through pest control and farm management).
The biosecurity measures summarised above
benefit all of Australia, and not all of their outcomes benefit primary
producers, especially where producers are not also importing product into
Australia. Although the levy would be imposed on primary producers, the government
appears to be overstating the likely benefits for primary producers.
The additional cost of the BPL will create further food inflation. Moreover, the BPL may be likely to make
Australian produce more expensive and less competitive, both within Australia
and in international markets.
If the collection of the levy cannot
be incorporated into existing levy collections this would present a significant
administrative burden for primary producers.
If biosecurity is intended to protect the Australian
flora and fauna and humans from exotic diseases, it seems there is a disconnect
if the cost is to be imposed largely on Australian farmers and food production.
This is general information rather than legal advice and is current as of 10 Oct 2023. We therefore recommend you seek legal advice for your particular circumstances if you want to rely on advice or information to be a basis for any commercial decision-making by you or your business.