Commodity Levy for avocados.

Transcription

1 Commodity Levy for avocados

2 Under the Commodity Levies (Avocados) Order 2013 Commodity Levy the NZ Avocado Growers Association Inc, NZAGA collects a compulsory levy on the sale of avocados to fund industry activities. This levy operates in accordance with the Commodity Levies Act A Commodity Levy lasts for six years after which payers of that levy must vote to continue that levy. Growers will be asked in 2018 to vote on a renewed levy to apply from the season. The rates for the Commodity Levy for avocados are: For export avocados: Promotion 20 cents per tray Export Commodity Levy 15 cents per tray A total of 35 cents per tray With a maximum of 50 cents per tray For fresh avocados sold in New Zealand: A maximum of 3% of the value at the first point of sale. 2

3 The Commodity Levy Order sets the maximum levy rates. NZAGA includes a remit at each AGM requiring growers to vote on the actual rate to be set for the following season. Commodity Levies Act 1990 The Act s principal role is to provide a method to fund primary industry activities. Under strict rules industry groups can elect to impose upon themselves a levy with legal backing. The levy has a six year life after which the levy must be renewed. Uses of Commodity Levy funding The Commodity Levy provides funding to undertake the activity required to deliver the annual and five year plans. Intended uses for Commodity Levy funding: The Act requires the industry to consult with the potential levy payers and conduct a referendum seeking support for a levy. An application for a levy can only be made if the ballot results clearly show there is a majority in support for the levy. When making a levy application matters to be specified include the levy rates, uses and who will pay the levy. These cannot differ from those specified in the ballot paper. What you vote on is what you will get. Governance Management and administration Communications Promotion, market access & market development Research, development & extension Biosecurity Industry Systems The Act itself is available from the Parliamentary Counsel Office website here: The Commodity Levy Order is available from the Parliamentary Counsel Office website here: 3

4 Commodity Levy referendum process To keep the levy in place there must be consultation with growers and a vote taken every six years to determine the levy structure moving forward. Provided there is sufficient grower support in the referendum, the industry body makes an application to MPI for a levy order. Each separate component of the levy must be voted on and approved by the majority of voters in the Commodity Levy voting process REFERENDUM ORDER The Commodity Levy Order for avocados expires in June To reapply for a new Commodity Levy Order, NZAGA needs to submit an application to MPI by the end of Consequently there will be a grower referendum on the Commodity Levy in April 2018 April/May 2018 June 2018 September 2018 October 2018 October 2018 Commodity Levy and five year plan info pack sent to growers Commodity Levy roadshows and consultation Final levy proposal confirmed Voting information sent to all growers Voting closes Referendum result announced APPLICATION PROCESS Provided sufficient grower support is received through the referendum an application will be made to MPI for a new Commodity Levy for Avocados. A Cabinet process will then take place to have the new levy order approved and established by June GROWER ROADSHOWS AND CONSULTATION Commodity Levy roadshows will take place in a region near you in April/May These will provide growers with an insight into the five year plan for the industry and the role of the Commodity Levy in helping us to deliver on the industry strategic objectives. We encourage all growers to attend the meetings and provide feedback on the future of the industry & the way it is funded. 4

5 Commodity Levy FAQ Who will pay the Commodity Levy? All growers in New Zealand producing avocados for sale will be responsible for paying the levy. Avocados sold direct to the public via gate sales will also be included. Why is a Commodity Levy structure used to fund the industry? Structuring funding through a Commodity Levy Order ensures that a number of mechanisms to protect growers are in place and enforced by the Act: Of the growers who vote in the referendum, 50% of growers must vote in favour of the levy and they must represent 50% of the production of those who vote. The NZAGA must report to growers at its AGM on the levy expenditure. The NZAGA must submit a financial report to the Minister for Primary Industries every year to account for its levy expenditure. The levy funds can only be used on activities permitted in the Act and specified in the levy order. The funds cannot be used to fund trading activity. Growers only pay the levy once they start producing and selling avocados. Who will collect the levy? The collection agents would be local market agents and avocado exporters How long is the levy in force? The levy automatically expires after six years. How does the avocado Commodity Levy compare to the levies of other industries? There are more than 20 Commodity Levies Orders (CLO) covering the majority of land based agricultural and horticultural products under the provisions of the Commodity Levies Act A summary of levies used in other product groups is available via the Commodity Levy page of our website The majority of industries are using a similar Levy structure as avocados, where a Commodity Levy funds the activities undertaken. NZAGA funding The NZ Avocado Growers Association Inc receives income from a number of sources: 1. Commodity Levies Levy imposed on avocados for domestic consumption: 3% of value on fresh fruit sales Levy imposed on export avocados [maximum 50c per tray] Base levy - 15 cents per tray Promotions levy- 20 cents per tray 2. Export systems fee 25 cents per export tray in the season 3. Registrations Grower export registrations Packer registrations Exporter registrations Other registrations 4. Other Income Avoscene advertising & subscriptions Interest Royalties 5

6 Delivery of the industry strategy during the current Commodity Levy period Six years ago we came to growers to seek their support or the 2013 Commodity Levy Order for avocados. Since then we have seen an exponential increase in industry value. The board s strategy is to support continued growth, to reach our 2023 goals of net sales of $280m and productivity of 12 tonnes per hectare. During this period the following levies and fees were in place: (b) Commodity Levy - Exports $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ 0.15 $ Promotions and market development $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 $ 0.20 Commodity Levy - as value at first point of sale - New Zealand market 3% 3% 3% 3% 3% 3% Export Systems Fee (formally EMS management fee) - Volume to Australia $ $ 0.15 $ 0.18 $ $ 0.25 $ Volume to rest of world $ $ 0.15 $ 0.18 $ - $ - $ 0.25 Registrations Grower export registration before 15 August $ 150 $ 150 $ 150 $ 150 $ 150 $ 150 Packhouse registration $ 2,650 $ 2,650 $ 2,650 $ 2,650 $ 2,650 $ 2,650 Exporter registration $ 5,150 $ 5,150 $ 5,150 $ 5,150 $ 5,150 $ 5,150 Exporter Market Access Levy $ 0.01 $ 0.01 $ 0.01 $ 0.01 $ 0.01 $

7 Industry strategy going forward Growers have received a copy of the situational analysis and five year plan for the industry. We are seeking your feedback on the five year plan through roadshows in April/May We also invite you to call or us with your feedback. The board will in September 2018 seek approval from growers of a further six years of Commodity Levy funding. The chart below shows the actual industry value from to , and the forecast for the current season and out of Net sales all markets in NZ$m $ - Millions New Zealand Australia Asia 7

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