Perceptions of MAF's regulatory impact on the grain and seed industry
2 Regulatory relationships
Government regulation aims to change the behaviour of individuals and/or to encourage organisations to operate in a certain way. Regulations do this by creating extra administrative responsibilities or requiring the consumption of mainly compulsory services provided by a regulator. The regulatory framework for a productive sector or industry is likely to contain a mix of regulatory instruments seeking to achieve a range of regulatory objectives.
The recent Quality Regulation Review, conducted by the Ministry of Economic Development, concluded that a regulated industry is impacted on not only by the cost of regulation, but also the way in which it is implemented. The review highlighted that quality regulation is not determined at a specific point in time, but is an ongoing activity due to the changing relevance and effectiveness of regulations. It recommended that if a quality regulatory environment is to be maintained, government and business must be committed to a culture of constant awareness and continuous improvement of regulatory settings.
The findings from the Quality Regulation Review are summarised in Appendix 1.
Regulatory activity is a large part of MAF's role. MAF recognises that Government policy and regulation are influential tools in determining the performance of the agriculture, forestry and food and related industries. This is reflected in MAF's Intermediate Outcome 1.3: "A business environment for the agriculture, food and forestry sectors that supports innovation, enterprise and high performance". MAF also recognises that to achieve a number of its regulatory objectives increasingly relies on support from New Zealanders. This is because in most situations it is not effective to try and force people to change behaviour, stakeholders will have to help government by becoming co-producers of the desired regulatory outcomes. This is reflected in MAF's Intermediate Outcome 2.3: "New Zealanders are informed and involved participants in MAF's regulatory systems".
Given the above, MAF places importance on understanding the impacts of the regulations for which it is responsible. In relation to the grain and seed industry, MAF is seeking to understand the impacts of all its activities, but is particularly interested in industry stakeholder views on regulatory delivery or implementation.
Understanding how industry stakeholders view the regulations they impose is important for regulators. At one level, the perceived fairness of the regulation will have implications for the level of compliance and consequently the level of enforcement activity required, (that is, positive reception to new regulation is more likely to result in high levels of "voluntary" compliance.) Notwithstanding philosophical or political views about whether any regulation is fair, (which is a policy choice question), stakeholders' view on the quality of the service provided by regulators is an indicator of organisational performance. If a regulator provides an acceptable level of service – in that it meets or exceeds the service expectations of the regulated – then "customer satisfaction" can be said to have occurred.
This is mirrored by the interest of the individual or organisation being regulated in whether the best job is being done within the existing regulatory framework by the regulating agency. This is in part about service quality (that can be objectively measured) and in part a comparative exercise (that is, how does the service performance compare to the operation of a similar regulatory framework).
Getting an outside-in view of a regulatory system is therefore about what stakeholders and service users think about how the regulatory system operates (that is, how it impacts on them).
In this regard, it is acknowledged that the relationship between the regulator and the regulated is inevitably an area of tension as compliance requirements can impose direct costs and extra administrative burdens. The existence of these direct and indirect costs, are not in themselves a reason for MAF to be concerned. It is, however, important to ensure that these costs are as small as possible and that total compliance burden is reasonable compared to the expected regulatory benefit and the existing cost structures in the regulated industry.
This review seeks, therefore, to explore the regulatory relationship with MAF from the perspective of the regulated, in this case grain and seed industry stakeholders.
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