Productivity Commission Inquiry: Report into the Regulation of Australian Agriculture

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Productivity Commission Inquiry: Report into the Regulation of Australian Agriculture

The Productivity Commission has released their Final Report into the Regulation of Australian Agriculture. The purpose of the Inquiry was to identify unnecessary regulation restricting the Australian agricultural industry across a broad range of relevant areas at both state and federal levels. Excessive regulation impacts the efficiency of current industry and is a disincentive for future investment. Further, associated administrative costs limit the capacity of businesses to function efficiently and respond flexibly to market changes. The inquiry does not support the removal of regulation beyond that which is duplicated or excessive. This requires cross jurisdictional cooperation and harmonisation of regulatory policy.

Regulation exists across the supply the chain in agriculture. Land tenure and licencing underpins the security of the agricultural industry. Current practices restrict the flexibility of land holders by limiting the type of agriculture that can take place on leases. Further, planning restrictions over sites restricts the capacity for development to occur efficiently. Environmental regulation is a necessary precondition to development yet there remains a need for such regulation to be mutually beneficial for developers/pastoralists and the environment to ensure ongoing investment. Issues regarding biosecurity, native vegetation conservation, soil and water degradation, and species protection are managed at both the state and federal level, often seeing a complex duplication of process for land users. The Inquiry found that water trading has benefited industry and has recommended the practice be continued.

The Inquiry further found that ethical considerations represented through regulation with regards to animal welfare and genetically modified crops must be based on evidence based policy rather than emotional concern. Competition regulation in the agricultural sector is important to limit the potential of market concentration and powerful collective bargaining among farmers. Foreign investment is heavily scrutinised in Australia, particularly since reform in 2015. Foreign agribusiness and purchase of agricultural land requires permission from the Foreign Investment Review Board.

The Inquiry recommended several recommendations to address these areas of concern. Key recommendations include:

Land Use Regulation

Recommendation 2.1

Land management objectives should be implemented directly through land use regulation, rather than through pastoral lease conditions. State and territory governments should reform land use regulations to enable the removal of restrictions on land use from pastoral leases.

Recommendation 2.2

Ensure that, where reforms to Crown lands confer additional property rights on a landholder, the landholder pays for the higher value of the land and any costs associated with the change (including administrative costs and loss of value to other parties). Set rent payments for existing agricultural leases to reflect the market value of those leases, with appropriate transitional arrangements.

Environmental Regulation

Recommendation 3.1

Governments should ensure that native vegetation and biodiversity conservation regulations:

  • Are risk based (so that landholders’ obligations are proportionate to the impacts of their proposed actions)
  • Rely on assessments at the landscape scale, not just at the individual property scale
  • Consistently consider environmental, economic and social factors.

Recommendation 3.2

Governments should continue to develop market-based approaches to native vegetation and biodiversity conservation. Governments could achieve desired environmental outcomes by buying environmental services (such as native vegetation retention and management) from private landholders.

On-Farm Regulation Of Water

Recommendation 4.1

The Australian Government should implement the findings of the Interagency Working Group on Commonwealth Water Information Provision to reduce duplication and unnecessary water management information requirements imposed on farm businesses.

Regulation Of Technologies

Recommendation 6.1

The New South Wales, South Australian, Tasmanian and Australian Capital Territory Governments should remove their moratoria (prohibitions) on genetically modified crops. All state and territory governments should also repeal the legislation that imposes or gives them powers to impose moratoria on genetically modified organisms by 2018.

Food Regulation

Recommendation 10.1

The Australia and New Zealand Ministerial Forum on Food Regulation should amend its policy guidelines to make labelling of genetically modified foods voluntary, and Food Standards Australia New Zealand should remove the requirement in the Food Standards Code to label genetically modified foods.

Foreign Investment In Agriculture

Recommendation 13.1

The Australian Government should increase the screening thresholds for examination of foreign investment in agricultural land and agribusinesses by the Foreign Investment Review Board to their previous level of $252 million (indexed annually and not cumulative).

 

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