GROWERS

Levy Information

Federal or National Levies

The Federal levy system was developed and refined in the late eighties. Each Horticultural or Agricultural industry is able to levy itself for R&D and Marketing on its own produce.

Avocados were one of those industries that saw the early benefit of a R&D levy. This was closely followed in the early nineties with a Marketing levy for Avocados.

To encourage industries to implement self levying, The Federal government agreed to match collected R&D levies dollar for dollar with a maximum Government contribution not to exceed 0.5% of GVP (Gross Value of Production for all of horticulture). Marketing levies are not matched. This system continues to this day.

Currently the Avocado industry has levies set at:

• 8 cents per tray for R&D
• 15 cents per tray for Marketing

The levies rates are soon to change. Details are provided below.

This system is managed through an Act of the Federal Parliament and with this comes responsibilities.

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New levy rates information

Throughout 2005, Avocados Australia undertook a full levy consultation with all growers to seek opinions and comments on proposed levies rates change and the related business case. As a result of this consultation and a vote by growers, the industry has supported a change to levies applied to Avocados. Although this has not yet been imposed, the new levy structure will be:

• 16 cents per tray for R&D
• 25 cents per tray for Marketing
• 0 cents for Emergency Plant Pest Eradication

These levies are expected to be made effective in the later half of 2006.

Implementing change to levies

The process which industry must undertake to implement changes to levies is well defined by government. Industry must consult widely and provide all growers the opportunity to contribute to the debate. The industry developed a business case for change, conducted grower meetings throughout Australia to present the arguments and organised an independently audited vote for growers to decide if a change to levies should be applied.

The business case supported a change in the existing Avocado levies to fund a range of activities in the areas of research & development (R&D), promotion and the establishment of an "Emergency Plant Pest Eradication" levy for emergency plant pest or disease eradication in the Australian Avocado industry.

The three main issues covered in the full levy consultation were:

1. An increased "R&D and Marketing levy" rate for fresh Avocados
2. Implementation of a reduced Avocado "processing levy"
3. Implementation of a zero "Emergency Plant Pest Eradication (EPPE) levy"

and provided answers to the following questions:

• why the levy change is needed;
• what the levy rates are now;
• what the levy rates will be;
• what the levy money will be used for;
• how levy investment decisions will be made;
• what the expected benefits of the levy change will be;
• how you can find out more.

The levy proposal was developed by Avocados Australia Limited following the development of a new Avocado industry strategic plan and the reviewing of the Australian Avocado industry's current R&D and marketing funding levels.

The "processing levy" implementation relates to the changing environment in the value added sector of the Avocado industry and the need to address an imbalance in the levy's relationship to the relative value of the processing Avocado and the benefit that is attributable to the Avocado processing sector.

The EPPE levy implementation is an industry commitment to the national plant health system. The agreement with the state and federal governments requires a mechanism that allows industry to commit one third of an agreed cost to an incursion event in the future.

It is important to note, that while the Avocados Australia endorsed the national Avocado levy changes, the Avocados Australia Limited did not seek to impose any element of the change without the support of the majority of commercial Avocado growers. That support was demonstrated through a formal ballot of all known commercial Avocado growers.

For more information on this topic, please download copy of the new "2005-2010 Strategic Plan for the Australian Avocado Industry" and a copy of "A Business Case for Change in National Avocado Levies" .

Open Letter to All Growers from Rod Dalton, Avocados Australia Chairman

Managing the Levies

How does Avocados Australia, the peak industry body for the industry, utilise these funds for the industry? Avocados Australia works in partnership with HAL to manage the R&D and marketing and promotional activities for the Australian avocado industry. The Industry Advisory Committee (IAC) for the avocado industry considers, recommends and select projects that best serve the strategic goals of the avocado industry with the limited levy funds available.

Each project is then managed on behalf of the Avocado industry by Horticulture Australia Limited (HAL). HAL is a company limited by guarantee that is owned by all the horticultural industries that have a Federal levy. HAL has the role of service provider to each of these industries. It administers the levies and the projects that are funded through the levies on behalf of the industries.

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How Can They Be Used?

Levies are not a big pot of money to be spent as the Avocado Australia wants. There are strict rules and processes on how, when and what they can be spent on. The levies are collected for the purpose of R&D and Marketing. This includes the administration, development and promotion of these areas.

Your levies cannot be used for any "agripolitical" activities whatsoever. Any person, publication or event that is funded through any levy cannot undertake any "agripolitical" activities.

This fact is not widely understood.

If you have any questions regarding your Avocado levies please call 07 3391 2344or email: admin@avocado.org.au

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