Perceptions of MAF's regulatory impact on the grain and seed industry
4 Findings
MAF's role
Grain and seed companies appeared to have a good understanding of MAF's role and the specific compliance requirements it administers.
However, it was found that some interviewees face difficulty in differentiating between compliance requirements administered by MAF and those administered by other government agencies. For example, some interviewees thought MAF was responsible for compliance requirements for the Clean Air Act (for example, for aerial spraying) and the Hazardous Substances and New Organisms (HSNO) Act (for example, approving appropriate chemicals to deal with newly introduced pest plants3). See Impacts on levels of innovation later in this Chapter, for further comment in relation to the HSNO Act.
Another demarcation issue for interviewees concerned the roles of Customs and MAF in post-inspection x-raying of containers for security requirements. This is further discussed in Duplicated or outdated compliance requirements later in this Chapter.
All interviewees understood the importance of MAF's role in protecting New Zealand from biosecurity risks. This was illustrated by the interviewees' knowledge of the difficulties New Zealand would face without biosecurity protection. This is further discussed in Purpose of MAF's compliance requirements on the next page.
None of the interviewees thought MAF was responsible for administering the Commodity Levy Act and believed this to be the domain of industry research organisations. The interviewees had no issues with the Commodity Levy Act requirements and understood that MAF simply processed the applications as required.
Some interviewees believed MAF should reintroduce an independent farm advisory service.
Some growers appeared to be wary of product and technique-testing results that are not from independent sources. Many commented on the lack of independent opinion available on products, such as different fertiliser brands. It was suggested that MAF could supply such independent assessments.
Some interviewees also felt the current system, where user pays for information, makes the uptake and implementation of new findings and research slower than ideal.
One interviewee claimed that MAF's current approach is too science-based and the agency needs to "play a more patriotic role" in supporting economic development.
Purpose of MAF's compliance requirements
Interviewees were asked about their likely actions in the absence of MAF's biosecurity compliance requirements. Feedback received suggests most interviewees would not significantly alter their current actions as they understood the purpose and significance of having these compliance requirements and its benefits to the industry. A minority of interviewees admitted the absence of biosecurity compliance requirements would allow them to explore opportunities for importing certain hybridised and genetically modified (GM) seeds.
Most interviewees recognised the need and importance of the current export certification system that allows New Zealand's grain and seed to be imported into other countries. They generally agreed that such a system is critical to providing credible quality assurance.
There were some negative views on the existence of MAF's compliance requirements. These were mainly centred on the purpose of these requirements, the costs associated with complying with these requirements, and an opinion that GM is "too sensitive a subject in the current political environment and [was] causing difficulties with imports."
In this context, one interviewee stated that MAF-funded research agenda should be broader, including, for example, independent testing of products, and not just purely science-based.
Impact of MAF's compliance requirements
Degree of impact of MAF's compliance requirements
Around two-thirds of interviewees rated the impact of MAF's compliance requirements as moderate and about a third rated the impact as high. One interviewee noted that while compliance requirements costs are increasing, the industry seems less concerned about other operational costs, such as fuel and fertiliser prices, which are also increasing.
Another interviewee described the effect of compliance requirements as cumulative and that the impact of compliance requirements was more psychological than anything else.
One interviewee stated the overall effect of compliance costs was it could create a mindset that it is a financial risk to employ staff, which could deter new entrants into the industry or existing businesses from expanding.
Figure 4.1: How would you rate the impact of MAF's compliance requirements on your grain and seed production?
Impacts on economic growth
Interviewees were generally supportive of MAF's compliance requirements and believed they had a positive impact on their businesses' economic growth. This is consistent with the comments in Purpose of Compliance Requirements on the previous page about MAF's import requirements being critical to the successful operation of the grain and seed industry.
Impacts on levels of innovation
Some interviewees felt MAF's compliance requirements limit their ability to import, and thus access, new genetic material for research. This was seen as having a negative impact on their businesses' level of innovation.
One interviewee highlighted that exporting to a country not listed in MAF's Importing Country's Phytosanitary Requirements (ICPR) register, is prohibited until MAF negotiates an agreement. This was seen as hindering potential business growth. It was suggested that MAF prioritise new negotiations and revisit the need to expand the ICPR register.
Although the HSNO Act is not administered by MAF, three interviewees mentioned it as an influence in the impact of MAF's compliance requirements. The interviewees claimed the HSNO Act stifles innovation. The confusion over MAF's role in relation to the HSNO Act is further detailed in MAF's Role at the beginning of this Chapter.
Most expensive or time-consuming compliance requirements
Opinions on the most expensive compliance requirement varied considerably and most are discussed elsewhere in this report. However, the most negative compliance requirement raised by almost all interviewees was the time it takes to clear imports into New Zealand.
Many interviewees claimed that an influencing factor in import delays is the lack of skill and knowledge among MAF's biosecurity inspectors of the seed and grain business. They felt this knowledge gap results in seed being unnecessarily sent for testing and cleaning, causing the importing company additional expense and time delays. They described this as a real source of frustration, and is further discussed in Are MAF staff competent? later in this Chapter.
A few interviewees suggested that a contributing factor to expensive or time-consuming requirements may be that, as the rest of the world tightens their import requirements, MAF is also placing more stringent processes on inspectors and expects an increasing level of accountability. The default position then, it was claimed, is for inspectors to test everything. This is further discussed in Are MAF staff competent? later in this Chapter.
One interviewee suggested that, as compliance requirements are tightened, MAF needs to ensure adequate numbers of knowledgeable staff to process consignments accurately and in a timely manner.
Most interviewees import only small amounts of stock seed and it was found that they resent MAF's approach in treating all consignments the same, regardless of size. Many stated that getting individual phytosanitary certificates for extremely small amounts of seed is very expensive and suggested that differences in scale need to be taken into account by MAF. This is further discussed in Estimated cost of MAF compliance requirements on the next page.
A few interviewees highlighted certification as an area of contention. They explained that maintaining MAF certifications (such as seed sampling) requires ongoing training, expense and time, when they believed their actual work experience and knowledge should suggest a commensurate level of expertise is already in existence. Another interviewee thought that the only benefits of accreditation are that businesses are seen as reputable and it can enable them to streamline their operations to a degree.
Some interviewees mentioned an older, "orange label system" which they felt had worked well.
Estimated costs of MAF's compliance requirements
Interviewees were initially asked to estimate the costs of MAF's compliance requirements on their end product. It became clear in the early stages of interviewing that this was a very difficult task. Interviewees were therefore given a number of options (by FTEs, cost per tonne, percentage of production costs etc). The majority of interviewees still found it difficult to estimate and some could not provide an answer. This resulted in a broad range of estimates.
Some interviewees thought that compliance requirements costs are fairly minimal, while others thought the costs are quite significant. A few interviewees commented that actual costs really depended on whether they experienced any unforeseen problems with imports. Two interviewees gave a broad estimate of compliance requirements costing about 6-10 percent of total production costs.
Another issue of concern was that the cost of seed testing is not based on volume, and therefore quite high when testing small amounts of seed.4 Therefore, companies testing larger volumes of seed could more easily absorb the costs, while the same costs would be quite significant for companies testing small amounts of seed. One interviewee noted that GM testing for small breeding lines could cost thousands of dollars for approximately 100 seeds or around $10 per seed.
Some interviewees considered the current transaction costs at the border as being a revenue collecting exercise for MAF.
Regardless of the detail surrounding costs, all interviewees commented that MAF's compliance costs to their businesses are increasing.
Duplicated or out-dated compliance requirements
No interviewees thought MAF had any duplicated or outdated compliance requirements.
Some interviewees thought MAF and Customs have very similar processes and, as a result, there is duplication of information provision and compliance processes for them. In addition, the interface between the roles of these two departments was not as seamless as desired. It was suggested that the work required to comply with MAF and Customs requirements could be streamlined to reduce time and costs involved for the industry.
This concern was echoed regarding the roles of the Environmental Risk Management Authority (ERMA) and MAF. It was suggested that streamlining or interfacing processes, such as auditing, currently conducted by both agencies, would remove duplication and reduce costs for the industry.
Implementation
Consistency of implementation
All interviewees believed that MAF treats each business the same with regards to the implementation of regulation. However, there were some issues raised in regards to consistency of MAF's clearance processes.
A common point raised by all interviewees was the perceived lack of consistency in import clearances. Interviewees believed seed imports are dealt with differently depending on which region they are sent to and whether they come in via mail, airfreight or sea.
The overwhelming consensus among interviewees was that clearing imports through Auckland was very difficult and time-consuming, while clearing imports through Christchurch was simpler. Interviewees believed this was due to a lack of familiarity and knowledge of grain and seed among Auckland staff. One interviewee suggested the need for a better release process and the introduction of a system to transfer packages to a different colleague or centre that is more experienced at dealing with the type of import at hand.
Compliance processes, such as documentation, are built into MAF's operating procedures and interviewees thought that this sometimes creates inconsistencies depending on how the procedures are managed by individual employees. They believed this is dependant on the employee's skills, knowledge, experience and personality. This issue is further discussed in Are MAF staff competent? later in this Chapter.
A number of interviewees also raised their dissatisfaction with specific changes to import and export regulations and the way these changes are managed. Imports of seed containing black grass, a weed seed, were specifically mentioned5. There was also considerable mention of recent changes to allowable soil limits in grain and seed exports to the USA.6 Interviewees found it difficult to understand why these changes were implemented when the restrictions were not applicable in the past.
A significant number of interviewees gave examples of seed entering New Zealand through the mail without being checked. One interviewee said some scientists used to send very small seed samples that they (as scientists) knew were clean and fine by regular mail (and was worth the risk). However, seed importers believed that some seeds sent by other individuals also seem to pass through. They believed that if the pathways are made too tricky to negotiate, then people look for alternative options.
Quality of MAF's processes and systems
Interviewees were asked to give MAF a rating score on the processes and systems of its compliance requirements. On a scale of 1 to 5, with 1 being very poor and 5 being very good, interviewees gave MAF an average score of 3.7. Most interviewees were quite positive in their remarks, acknowledging the marked increase in collaboration between MAF and the industry.
One interviewee, however, believed that "the industry is doing MAF's job", and provided the example of a commercial enterprise developing a procedure manual for a non-standard business set-up, and then submitting it to MAF for approval.
Contact with MAF
Supply of information from MAF
Interviewees were asked of their level of certainty in having all the information required to comply with MAF's compliance requirements. Interviewees were generally quite positive regarding availability of information on export requirements, but thought it more difficult to obtain information on import requirements. Some interviewees felt that exporting to standard countries is generally smooth but the processes get more difficult when exporting to a new country.
While interviewees acknowledged the MAF Biosecurity New Zealand website more than likely contained all the material required, most experienced difficulty in navigating around the website to find the import and export requirements. Suggestions included redeveloping the website to make the information more easily accessible, introducing a search function, allocating an area for the different industries, and dividing the relevant information into importing and exporting requirements. Another interviewee suggested both technical and common names be listed on the website to ensure better understanding.
It was also highlighted that MAF does not proactively communicate information and changes in requirements; and the onus is on the industry to be aware of changes that may have been made.
Figure 4.2: How certain are you that you have all the information you need to comply with MAF's compliance requirements?
Finding the right person to contact
Most interviewees could easily contact the right person as they contacted the same person each time. Interviewees preferred to deal with MAF staff they already knew. Some interviewees commended MAF's participation in industry events such as the NZGSTA annual conference as they felt this led to improved networks and enhanced relationships between MAF and the industry.
There were some concerns raised about the timeframes and efficiency of service delivery by MAF staff. It was claimed that the timeliness and effectiveness of service provided depended on individual officers' personalities. One interviewee suggested that MAF should introduce a co-ordinator or contact centre function that would provide a centralised point of contact with decision-making authority and ability. This would also ensure consistency in levels of service delivery.
It was also found that a number of interviewees preferred to bypass local MAF staff to seek solutions and clarifications directly from the MAF Head Office in Wellington. They claimed that the responses from Head Office were timelier, more credible and had greater chances of being upheld.
Are MAF staff competent?
The grain and seed industry consists of many individuals who have spent their entire careers in the industry, and as a result are highly experienced. Many of them were critical of MAF's competency with regards to their industry.
Many interviewees raised their concern regarding the impact of the current employment climate – high turnover rates, lack of specialisation, relative inexperience – and the influence this has on MAF's human resource pool and capabilities. Interviewees believed MAF's staff turnover is contributing to reduced levels of competency in the organisation. As a consequence, this is perceived to have an effect on the industry. It was suggested that MAF employ strategies to retain experienced staff, develop handover and training procedures for new employees, increase training to up-skill and specialise staff and develop a relationship management system to ensure industry contacts are not lost after an employee leaves.
North Island interviewees were generally complimentary regarding the competency of MAF staff, while a majority of South Island interviewees felt that MAF staff lacked skills, knowledge and experience of the seed and grain business.
North Island interviewees appreciated the complexities that MAF staff face in working across a lot of commodities, but felt MAF staff need more decision-making authority besides just following procedures and regulatory manuals.
The most outstanding complaint by South Island interviewees was that MAF staff seemingly lack required skills to efficiently and accurately inspect grain and seeds. Interviewees claimed this results in consignments being held up at the border.
Many interviewees admitted that the industry coaching MAF is inevitable. However, one interviewee, highlighted a potential risk that "the regulated training the regulator" could result in MAF not being recognised as independent or impartial from the industry.
MAF attitude
Interviews found the attitude of MAF generally acceptable. However, negative feedback was received regarding MAF's organisational culture and the authoritarian attitude and personal qualities of some staff.
Three interviewees were emphatic that MAF has a bad culture. One interviewee believed the culture of MAF is causing inefficiencies in service delivery. Another interviewee claimed the "bad attitude is permeating from top-down and creating a bad culture at MAF."
Some interviewees claimed MAF has an authoritarian attitude and does not work well with the industry. One interviewee highlighted that MAF needs to acknowledge that both the agency and the industry are working together for the betterment of New Zealand and therefore are actually on the same side. Another interviewee stated the inexperience, lack of empathy and understanding of the industry made interaction with MAF very frustrating.
Three interviewees stated some MAF staff personalities cause them to be continually cautious in their dealings with MAF to ensure the relationship is preserved for the future.
More positive comments, however, indicated interviewees are appreciative of, and acknowledge, MAF's role, its complexities and the commitment by employees in upholding MAF's purpose and outcomes. Some interviewees highlighted the exceptional efforts of some staff in maintaining good relations with the industry and working in an active, collaborative and consultative approach.
Quality of service received
Interviewees were asked about their level of satisfaction when dealing with MAF staff regarding compliance requirements. Results in relation to the service received were polarised. Almost 60 percent of interviewees were satisfied or very satisfied with the level of service received and over 40 percent were dissatisfied or very dissatisfied. In contrast to this, interviewees expressed higher levels of satisfaction with the actual end result. Two-thirds of interviewees said they were either satisfied or very satisfied with the end result.
Figure 4.3: When you last had contact with MAF staff about compliance requirements, how satisfied were you with the service you received?
Figure 4.4: When you last had contact with MAF staff about compliance requirements, how satisfied were you with the end result?
MAF compared to other regulators
A large majority of interviewees thought that MAF's regulatory performance is the same as, or better than most other regulators. Interviewees found MAF professional and sensible. One interviewee acknowledged MAF's effort in being increasingly consultative and service-oriented. However, there was also negative feedback around the MAF culture and complexity of some of its processes. Comments comparing MAF to the Australian Quarantine and Inspection Service (AQIS) were mixed.
Figure 4.5: Thinking about the other compliance requirements involved in grain and seed production, how would you rate MAF?
Understanding the grain and seed industry
The final question aimed to provide the interviewees with an opportunity to raise any points that would help improve MAF's understanding of the grain and seed industry. Some of these points have been discussed elsewhere in this report. The remaining points are outlined below.
Understand the benefits of working in partnership with industry
A large number of interviewees expressed a desire for increased collaboration between MAF and the industry. One interviewee stated the MAF culture has moved from being a partnership to now being one of opposition. Interviewees were optimistic of increased dialogue with MAF and believed collaboration is the best approach to finding practical and workable solutions for the way forward on a majority of industry issues.
Some interviewees regarded their industry as customers or shareholders in the "MAF business" and suggested a more customer-centric approach by MAF was needed.
Understand how decisions affect industry
Interviewees felt MAF needs to better understand the practicalities of how grain and seed businesses work and the effects and constraints caused by MAF's regulatory decisions.
One interviewee commented that MAF employees delegated with the responsibility for setting regulatory policy may not understand the industry and the wider agricultural context.
Another interviewee described the grain and seed industry as "the Cinderella of agriculture in New Zealand" as it is an industry of significant importance, contribution and potential, but has a low profile. Other interviewees emphasised that New Zealand's pastoral industry and export markets heavily rely on New Zealand's seeds and they should therefore receive greater focus and priority.7
One interviewee found New Zealand to be very stringent in its enforcement of requirements under law, in comparison with other countries where broader interpretations are used. This was claimed to have negative effects, such as high costs for compliance requirements and hinders business innovation. It was, however, also acknowledged that enforcement had positive effects, such as the perception that New Zealand exports are of high quality and New Zealand meets most other countries requirements, which gives exporters more freedom of opportunity.
Another issue raised was MAF profiling seed industry people as high risk travellers. A large proportion of interviewees were frustrated to think they were stereotyped by their industry of occupation.
Take more responsibility for decisions
Interviewees felt MAF staff should be able to make decisions more promptly. Three interviewees commented that MAF was too risk averse and decision making was time consuming and process-driven. This echoes similar views in found Most expensive or time-consuming compliance requirement and Are MAF staff competent?
3 MAF is the enforcement agency for new organisms under the HSNO Act. MAF carries out enforcement in relation to the importation, containment and conditional release of new organisms using powers under both the HSNO and Biosecurity Acts. See http://www.ermanz.govt.nz/resources/publications/pdfs/ER-QG-14-3.pdf for more information.
4 International seed sampling rules stipulate the amount of seed to be sampled. This is done on a sliding scale which results in small seed lines having a proportionally larger amount of seeds sampled.
5 MAF staff experienced considerable lobbying from Federated Farmers and other industry bodies to ensure that black grass stays out of New Zealand.
6 Soil contamination concerns were first raised when US Department of Agriculture officials stopped some consignments of NZ seed due to soil contamination. The USA wanted a soil limit of zero, but MAF negotiated the current limit of 0.1%.
7 Some analyses estimate that the seed industry is directly and indirectly responsible for over 60 percent of New Zealand's exports.
Contact for Enquiries
MAF Information Services
Pastoral House
25 The Terrace
PO Box 2526
Wellington, NEW ZEALAND
Fax: +64 4 894 0721
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