Appendix 1: Information to Assist the Leadership of New Industry Organisations

The early leaders of new industry organisations must deal with a wide range of issues. Many of them are new to this type of role and, unless they are closely aligned with an established industry, it is often difficult to find out where they can go for assistance and funds to carry out the activities required by the industry.

This document is an attempt to provide a brief overview of these issues, and to identify sources of funding and assistance for industry organisations undertaking a range of activities required for successful industry development.

The aspects covered are:

  • The structure of the industry organisation
  • Setting up and planning
  • Research and development
  • Quality management
  • Market information/market development
  • Legislation to assist industry.

The Structure of the Industry Organisation

When you are deciding what form your industry organisation should adopt, there are several issues to consider, since they will be affected by this decision. They include:

  • Legal liability of members for the organisation's debts, etc.

Formal legal structures such as incorporated societies or limited liability companies ensure that the individual members of the group do not have personal legal liability for the organisation's activities.

Most of the industry organisations that represent growers in New Zealand are set up as incorporated societies under the Incorporated Societies Act 1908. Although a society can generate revenue from its activities (subscriptions, provision of information, conferences, etc.), it may not become a trading operation. Some industry organisations that are incorporated societies set up separate companies to be their trading arms. An incorporated society can carry out any activities it permits under its own rules, provided that they are lawful and are not carried out for the financial gain of its individual members.

Those industry groups that have become limited liability companies are most commonly "Recognised Product Groups" (RPAs) under the Horticulture Export Authority (HEA). In some industries there is a separate grower group, which is an incorporated society, and an RPA that represents not only growers, but also exporters and other industry organisations. In others (e.g. the persimmon and blackcurrant industries), there is only an RPA, established as a limited liability company, to represent the interests of the industry as a whole. This is more likely to occur later in industry development, when the sectors of the industry have had time to gain confidence that they are working toward the same end.

  • Access to outside funding for industry activities:

Although it is possible to set up an industry group without any formal legal structure, it will not be possible for your group to obtain funding from most outside sources for research, market development or other activities unless you set up a company or society.

  • Exemption from income tax

An organisation does not have to be a corporate body in order to apply for exemption from taxation, which will be granted providing it meets the conditions of the Income Tax Act 1994 (section CB 4). New Zealand primary sector industry organisations generally meet the requirements for exemption.

  • Use of legislation to assist in industry activities

It is necessary for an organisation to become a body corporate (e.g., an incorporated society or limited liability company) if it proposes to implement a commodity levy (under the Commodity Levies Act 1990), or to become a Recognised Product Group under the New Zealand Horticulture Export Authority Act (1987). Most organisations that presently operate commodity levies are incorporated societies, while the Recognised Product Groups under the HEA (and which represent growers, exporters and other industry participants) are limited liability companies. The HEA recommends that groups considering forming a product group meet with HEA staff in the early stages to discuss the most suitable legal entity for their industry.

Becoming an Incorporated Society

Any group of 15 or more people (individuals or corporate bodies) may apply for incorporation so that:

  • the society is a separate legal entity from its individual members;
  • it can carry on its activities uninterrupted by changes in membership and/or office bearers;
  • members are not personally liable for any debts, contracts or other obligations of the society except where the debts, etc. have resulted from unlawful actions or financial operations. In those cases the members involved do have personal liability;
  • members can have certainty that the society will conduct its affairs properly, since its rules must meet the minimum requirements of the Incorporated Societies Act 1908;
  • members have no individual claim on the property of the society.

Resources

  1. The Ministry of Economic Development, Business and Registries Branch www.med.govt.nz/templates/StandardSummary____167.aspx#P164_14052 , provides a useful webpage, on registering an incorporated society that deals with:
  • What is an Incorporated Society?
  • Who May Form an Incorporated Society?
  • What Can an Incorporated Society Do?
  • Lawful Activity
  • Financial Gain
  • Authorised Activities
  • What are the Advantages of being an Incorporated Society?
  • What are the Procedures for Incorporation?
  • The Name
  • The Rules
  • Presentation of Rules
  • The Application
  • Statutory Declaration
  • Applying for Incorporation

This website also provides information on the effect of the Incorporated Societies Act 1908 on a society and its members after incorporation and offers advice on matters that are not covered by the Act.

  1. The Department of Internal Affairs website provides an "Online Community Development Resource Kit" that gives an overview of the process of setting up a community group, which may also be of value to those intending to set up a producer group.
  2. An application for incorporation is made on a form called "Application for Incorporation of a Society" (Comm Aff 3), which is available from the "Forms and Fees" section of the Information Library of the Companies Office website at www.companies.govt.nz . It may also be obtained from your Regional Companies Office (contacts included in the list of contacts and other information at the end of this document). A schedule of fees is also available from these sources.

Becoming a Limited Liability Company

Those intending to form a company can register the company on-line very easily, and the Companies Office website guides those intending to register a company through the process very clearly. Draft constitutions are available from the Companies Office but an account must be set up before these are available. However, it is recommended that legal advice be sought when setting up a company.

A company can be incorporated with, or without, a constitution. If you are submitting an application for incorporation with a constitution you have the option of preparing your own or selecting a third party authored draft.

Resources

  1. The Ministry of Economic Development website provides an on-line overview of company registration at http://www.med.govt.nz/templates/StandardSummary____167.aspx .
  2. The Companies Office website at www.companies.govt.nz gives access to all the information and forms you will need to incorporate. Some of these, including access to a range of draft constitutions are available only if you open an account with the Companies Office. This can be done on-line by selecting the registration tab at the bottom of the homepage screen. The website offers:
  • A detailed on-line guide to filing company documents and an "Online Company Incorporation Training Guide" at www.companies.govt.nz that can both be accessed by selecting Operations/Companies Office/Introduction to Companies Office On-line Services.
  • The forms to use for on-line incorporation and both director and shareholder consent forms are also available by selecting Operations/Companies Office/Forms and Fees.
  • Draft constitutions, including a variable section that you complete and a fixed part that is held by the Companies Office and linked to your application when you incorporate the company, are available to account holders only since there is a charge for some of these.
  • Help is also available from the Regional On-line Services Consultant at your regional Companies Office or by contacting the Companies Office in your region (contact details in the list of contacts and other information at the back of this document).

Obtaining an Exemption from Income Tax

It is a good idea to get general approval from the Department of Inland Revenue (IRD) for a taxation exemption before registering a constitution with the Companies Office, because it is easier to make any changes required to meet exemption requirements at this stage. IRD will approve applications for exemption only if:

  • The written aims of the organisation meet the requirements of the Income Tax Act 1994 and its activities to date fit in with those aims.
  • Any clause in the society's rule that allows payments to members (e.g. if a member is paid by the society to work for it in any capacity) must state that members cannot have any influence on the amount they are paid.
  • The constitution or rules include a winding up clause which should state that any assets left after all debts have been paid should be transferred to another organisation, not to individual members.
  • The constitution states that the rules cannot be changed so that they no longer comply with the requirements for exemption.

Resources

Inland Revenue has published a booklet (IR 254) entitled "Clubs and Societies: A tax guide for clubs, societies, non-profit bodies, associations and other groups" that describes the tax obligations of a non-profit organisation with respect to income tax, GST, PAYE, fringe benefits tax and ACC premia. This is available from IRD or from the website: http://www.ird.govt.nz/resource/publicat/index.htm 

Assistance with Setting Up and Planning

When you are first setting up an industry group, or early in its existence, there are a number of tasks you may wish to undertake and issues that you may need to develop strategies for. These include holding initial meetings, developing an industry strategic plan and determining the industry's technology goals and planning to achieve them.

One of the most difficult tasks for new industry organisations in New Zealand is gathering basic information about the scope of their industry and details about the production base, particularly if there is any division or dissent about the industry. Such information is critical when planning for infrastructural development, or if the industry wishes to implement a commodity levy to fund industry activities. While there is no simple answer to this problem, sound organisation and planning will help ensure that the industry organisation is able to demonstrate the benefits of membership early. Growers join industry organisations much more readily when the benefits of doing so are obvious, and the response to membership surveys, etc. is likely to be much higher. In addition, the early establishment of regional structures with strong links to the parent organisation helps ensure that the executive has a better knowledge of the industry and those involved.

It may be possible to obtain funding to assist your group to obtain professional assistance with some of the activities that will help establish the industry organisation, and the industry itself.

The Agricultural and Marketing Research and Development Trust (AGMARDT) "Industry Support" programme provides funding towards "the initial setting up of an industry" and "assistance to emerging producer organisations". The activities that would be eligible for such funding are not specified and AGMARDT will consider each application on a case-by-case basis. If you have a defined task for which you would like external funding, the initial "Industry Enquiry"

form is simple to complete, and more detailed application is not required unless the initial enquiry is approved. Most grants that would be offered under this programme will be of between $5,000 and $50,000 and the Trustees prefer that the industry group also makes a cash contribution towards costs, as an indication of commitment to the project. Applications for grants under this programme can be made at any time of the year.

The Fruitgrowers Charitable Trust, which was established by the New Zealand Fruitgrowers Federation, makes grants for a range of purposes that will benefit the fruit industry. The establishment of fruit industry organisations is one of the specific areas for which grants are made and any project that benefits the fruit industry will be considered. A new industry group applying for a grant from this source must comprise growers who would be required to pay the Orchard Fruit Levy under the Commodity Levies Act (1990) to the Fruitgrowers Federation, once production is established. There are no established maximum or minimum grant levels and applications should be submitted by means of a letter describing the project, its total cost, industry contribution and expected benefit to the fruit industry. Applications are considered twice a year but meeting dates change annually.

If your organisation wishes to develop a research or technology strategy, Technology New Zealand has several schemes that are components of the Techlink programme, which may help you pay for expert assistance. They include:

  • Current Position Analysis, which will contribute up to $1125 for a technically qualified consultant to work with your group to identify technological priorities. This type of analysis may be useful in the very early stages of your group's development.
  • Technical Consultancy Projects can help you fund expert assistance to help you define a technical development project by identifying existing technologies, the extent to which a goal is achievable, sources of expertise in the area and the likely cost of development work. Maximum funding available is $2,813 (including GST).
  • Technology Planning Projects and Business Networks funding may assist you if your industry's new opportunities for growth require technologies and skills it does not yet have. Under this scheme Technology New Zealand will provide matching funds for TechLink consultants to assist you to develop a technology strategy. No maximum level is specified.
  • TechNet Expert Access allows you to call your local Crown Research Institute or University for a limited period of consultancy on a specific technical issue. The funding available is $2,000 (including GST) per project, which is paid directly to the consultancy provider. Access is directly through the TechNet experts who are listed on the Technology New Zealand website.

The Industry New Zealand Enterprise Awards Scheme is not specifically designed to cover activities of this sort and they are not, in general, likely to be ranked highly according to the assessment criteria used for the scheme. However, Industry New Zealand is a new and evolving organisation itself and it may be of value to telephone the Enterprise Award Scheme staff to discuss whether an application for funding for your project is worthwhile.

The economic development agencies in some areas of the country, particularly the south of the South Island, are active in assisting rural development in their regions. In Southland the "Crops for Southland" initiative is assisting the development of a number of new industries and the Otago Rural Development Trust has assisted in establishing a number of new product groups in Otago. The economic development agencies that are members of Economic Development Agencies of New Zealand (ECANZ) are listed in the back of this document although there are some that are not members of the national organisation. Your local authority will be able to advise whether there are any rural economic development initiatives in your region.

Resources

  1. The Technology New Zealand hotline, (0800 TECHNZ or 0800 832 469), is the first point of contact. Investment managers there will discuss the eligibility of and funding options available for your project. If another funding source would be more suitable you will be advised.
  2. Technology New Zealand has offices in Auckland, Wellington and Christchurch (contact details in the List of Contacts and Other Information later in this Appendix).
  3. Information on AGMARDT's Industry Support Programme is available at its website, which provides a link to a simple on-line industry enquiry form. If the Trustees approve this you will be asked to submit an Industry Support Grant Request, which will be sent to you at that time.
  4. Information on the Fruitgrowers Charitable Trust grants can be obtained by writing to the Secretary at PO Box 2175, Wellington or telephoning (04) 472 6559.
  5. An overview of the Enterprises Awards is given on the Industry New Zealand website at http://www.industrynz.govt.nz/sme/sec03_enterprise_awards.html , which also provides links to the scheme guidelines and application forms. A brochure is available from Industry New Zealand, PO Box 2878, Wellington. It would be valuable to discuss the project you wish to fund, with Enterprise Award scheme staff (04 495 5080) before proceeding.

Research and Development

There are several sources of funding for research and development (including technology transfer) that are open to new industry organisations in New Zealand. All are contestable, and it is most important that the application you submit clearly describes the way in which your project meets the objectives of the funds provider to whom you are applying, not just the goals of your own organisation. Many applications received by these organisations fail to address those objectives adequately.

Research Providers

While there are many research providers in New Zealand, those most likely to provide research services to agricultural and horticultural industry groups are Crown Research Institutes and Universities. A list of these can be found in the list of contacts and other information at the end of this report. Other research providers are listed on the Technology New Zealand website and in "Contacts in Agriculture".

Funding for Research and Development

Perhaps the most likely source of funds for research, other than environmental research, is Technology New Zealand, a part of the Foundation for Research, Science and Technology (FRST), which was established to help businesses develop and adopt new technology. Its contestable funding programmes include:

  • Grants for Private Sector Research and Development that provide up to 33.3% of any increase in research and development expenditure on product or process development, adaptation or upgrading, by small and medium sized businesses. The size of grants ranges from a minimum of $10,000 to a maximum of $100,000 (including GST). In order to apply for a GPSRD funds you will need to identify a Technology New Zealand agent or research provider to undertake the research and guide you through the application process. You can register your interest on-line at the Technology New Zealand website and the local agent will contact you, or you may select an agent from the list on the website and contact them directly.
  • Technology Acquisition Investigation provides for assessment of potential technology solutions (both in New Zealand and overseas) to achieve specific development objectives. Maximum funding available is $25,000 (including GST).
  • Technical Assessment Projects provide for short-term experimental investigations of the technical feasibility of a critical step in a development plan. Maximum funding available is $25,000 (including GST).
  • Product or Process Development Projects provide funding for innovative technological developments, which result in the business moving towards high value, high margin products; processes or services, and/or markets. Funding is available for up to 50% of project R&D costs. This may include funding for experienced researchers or students to work on R&D projects.
  • Technology for Business Growth provides partial funding, of up to 50% of the cost of research and development and technology transfer projects that will increase the level and quality of research and development in industry; encourage business growth and improved international competitiveness through technological development within businesses and catalyse and support improvements in the management of technological innovation.
  • Technology Information Fellowships support science, technology and engineering projects undertaken by undergraduate, masterate, doctorate and post-doctorate researchers and conducted in, and managed by, companies.

Applications for Technology New Zealand funds must be firstly business proposals, not just research proposals per se, although full details of the research are required. It will be necessary to show how that research will contribute to your business success. Application forms are not unduly complicated and your agent will guide you through the process.

For new industries to gain access to other funds administered by FRST they need to establish a relationship with the Crown Research Institute or other research provider most closely aligned to their sector (contact details in the list of contacts and other information at the back of this document). However, it appears likely that access to these funds will be increasingly difficult for new industries. Significant changes to FRST portfolios have been initiated and will take place during the next few years. FRST will move away from involvement with any commodity research, including new crops programmes, except where these fit into portfolios dealing with niche markets. The New Economy Research Fund, into which money is being shifted from the Public Good Science Fund, will be used to fund high-value high-technology projects.

The Agricultural and Marketing Research and Development Trust (AGMARDT) Progressive Farming Grants were established to "assist groups of farmers/growers who have identified a problem, and/or an opportunity to access and manage scientific and technological solutions in a focused manner." Although there is no fixed grant level, most have been made within the $5,000 to $50,000 range. The Trustees prefer to grant applications where the applicant(s) propose(s) to make a cash contribution towards project costs as an indication of their commitment. Applications for grants under this scheme are considered quarterly, and the closing dates are 28 February, 31 May, 31 August and 23 November. Applicants first submit a project inquiry and proceed to a more detailed application only if this is approved.

The Fruitgrowers Charitable Trust makes grants to fruit industry groups for scientific research, training and education. There are no established maximum or minimum grant levels, although large, long-term projects are unlikely to be funded. Applications should be submitted by means of a letter describing the project, its total cost, industry contribution and expected benefit to the fruit industry. Applications are considered twice a year but meeting dates change annually.

MAF - The Sustainable Farming Fund (SFF) was established in 2000 to support community-driven programmes aimed at improving financial and environmental performance of the land-based sectors. A number of the grants to date have been made to agricultural and horticultural industry organisations to investigate technology issues of interest to their industries. Grants may be made for a range of topics including but not restricted to:

  • Adding value and making market connections
  • Investigations into the efficient use of land-based resources, including water
  • Demonstration projects
  • Information/technology transfer
  • Identifying barriers to and options for improved land use and management
  • Access to information/knowledge
  • Resource inventory work
  • Access to tools to convert information/knowledge into options and to make informed decisions

These topics are deliberately broad to allow organisations to put forward any projects that they consider will meet the schemes objectives. The application process involves two stages with the first requiring only a two page expression of interest. You will be asked for a more detailed application only if the proposal is viewed positively.

The maximum value of an SFF grant is $200,000 (GST inclusive) per year. The SFF will provide up to 80 percent of the total costs of the project and the applicants must provide the remaining 20 percent in cash or "kind". Generally the SFF should be the only source of Government funds to the project, but if funding is also received from other Government sources the total Government contribution cannot exceed 80 percent of project costs.

The criteria by which projects are assessed are clearly specified and it is important that applicants clearly describe both the problem/opportunity and how the project will help solve/facilitate it.

The Ministry for the Environment (MfE) through the Sustainable Management Fund (SMF) funds research into practical environmental issues. Its areas of funding are currently:

  • Maintaining and enhancing the exercise of kaitiakitanga (project series 1000)
  • Sustainable land management and the management of non-point sources of water pollution (project series 2000)
  • Contaminated sites and degraded environments (project series 3000)
  • Waste management (project series 4000)
  • Monitoring, indicators and comparative risk (project series 5000)
  • Voluntary methods (project series 6000)
  • Economic instruments (project series 7000, 1994-1997)
  • Influencing attitudes and behaviour (project series 7000)
  • Resource Management Act 1991 and Hazardous Substances and New Organisms Act 1996 practices and training (project series 8000)
  • Local and regional environmental quality standards (project series 9000).

The SMF has funded research into integrated pest management systems for primary sector industries", training in Resource Management Act issues, and the development of quality assurance systems.

Resources

  1. The Technology New Zealand website http://www.technz.co.nz has information on all the Technology New Zealand programmes, as well as access to downloadable application forms.
  2. The Technology New Zealand hotline (0800 TECHNZ or 0800 832 469) is the first point of contact. Investment managers there will discuss the eligibility of, and funding options available for, your project. If another funding source would be more suitable you will be advised.
  3. There are Technology New Zealand offices in Auckland, Wellington and Christchurch (contact details in the list of contacts and other information at the back of this document). The Technology New Zealand website also provides many useful links to sources of information that may be of assistance to your industry organisation. They include:

    4. Business

    Technology Companies Index

    TechNet Experts

    TechLink Consultants

    Personnel Consultants

    Business Technology Articles

    Seminars & Conferences

    Education & Training

    Information

    Databases

    Information

    Market Intelligence

    Publications

    Other International RST Sites

    Foresight

    Organisations

    Government

    Science Providers

    Industry Associations

    Venture Capital/Business Funding

    Business Support

    Other organisations
  4. The Foundation for Research, Science and Technology website at http://www.frst.govt.nz/ provides details of Public Good Science Fund portfolios and projects, the New Economy Research Fund and other programmes it administers.
  5. Guidelines to the ADMARDT Progressive Farming Grants can be found at the organisation's website and can a downloadable Project Inquiry Form.
  6. The Sustainable Farming Fund page on the Ministry of Agriculture and Forestry website at  provides information on the eligibility of applicants and projects and the criteria by which projects will be assessed. The application forms and guidelines are downloadable from this site or may be requested by email from sffund@maf.govt.nz or by mail from: Sustainable Farming Fund, c/- Ministry of Agriculture and Forestry, PO Box 2526, Wellington. If you have any queries about the scheme you are advised to telephone MAF ((04) 894 0100) and ask to speak to a staff member in the SFF section.
  7. Details of the Sustainable Management Fund criteria, application process, projects funded to date and a downloadable application form can be found on the Ministry for the Environment website at mfe.govt.nz/withyou/funding/smf/. Additional information can be obtained from the Senior Contracts Advisor for the SMF at: phone (04) 917 7401; fax: (04) 917 7523; email: murray.bell@mfe.govt.nz .
  8. "Contacts in Agriculture", an annual publication listing contact details for a large range of organisations involved in the agricultural and horticultural sector or providing services to the sector, can be ordered on-line at http://www.contacts.co.nz/ . It can also be ordered by phone ((03) 573 4471), or fax ((03) 573 4472).

Quality Systems and Standards

To be successful, primary sector industries must ensure that their products comply with the legislative requirements of the markets in which the products of the industry will be sold and with the needs of consumers in terms of food and environmental safety. It is essential to identify these requirements before developing or adopting quality management systems.

Assistance with Quality Assurance Scheme Development

The Ministry of Agriculture has developed standards that prescribe the technical requirements with which an agricultural product or service has to conform in export markets. To date they have been produced and published by MAF Biosecurity Authority and MAF Food Assurance Authority personnel in consultation with the relevant industry and are available on the MAF website. MAF Food Assurance has also been responsible for developing, on behalf of industry, export protocols to allow products to be exported to specific markets. However, a new Food Safety Authority is soon to be implemented and will integrate the food regulatory functions of the Ministry of Agriculture and Forestry (MAF) with those of the Ministry of Health. It will be a semi-autonomous body attached to MAF. At present all queries with respect to standards and export protocols should be directed to the Director, MAF Food Assurance Authority, who will refer you to appropriate staff.

Industries commonly adopt quality management systems that cover food safety, environmental safety and compliance with biosecurity requirements in production. Their development is costly and complex and involves extensive consultation between the industry and a range of other parties to establish the areas in which the industry will require such systems. Professional assistance will certainly be required by any industry group developing its own quality management system and may be of considerable value in establishing the industry's needs with respect to quality management.

If your industry is considering adopting or developing a quality management system or standard for a fruit or vegetable product, it would be wise to contact the Vegetable and Potato Growers Federation of New Zealand (Vegfed) ((04) 472 3795) or the New Zealand Fruitgrowers Federation ((04) 472 6559) initially. These organisations have combined to develop the "Fresh Produce Industry's Approved Supplier" programme, which has already received support from major retailers in New Zealand. Work is presently under way to gain official acceptance in European markets.

If the product of your industry is a processed fruit or vegetable product, early discussions with Vegfed may be of assistance in determining the first steps in the development or adoption of your own programme.

For other industries, identification of industries producing products in a similar category (fibre, meat, etc.) and discussing their systems and sources of assistance will be of value.

There are a number of consultancy firms (both in New Zealand and internationally) who work in the area of quality management, and discussion with similar industry groups is likely to be the most satisfactory method of assessing their ability to meet your industry's requirements. "Contacts in Agriculture" provides a listing of agricultural/horticultural consultancy firms and their specialist areas, and the telephone yellow pages list some quality assurance consultants.

In the primary sector AgriQuality New Zealand Ltd has worked with a number of industry groups (including the fresh produce industries) on the establishment of comprehensive quality management schemes. Agriculture New Zealand and Lincoln Ventures are both involved in the development of environmental safety assurance systems for the sector.

Sources of Funding for Quality Assurance Scheme Development

The Ministry for the Environment has assisted in funding several environmental quality management schemes for primary sector industries under its Sustainable Management Fund (SMF), which was set up to support the community, industry, iwi, and local government in a wide range of practical environmental management initiatives. Such projects are funded under its "Voluntary Instruments" project series. More details of the SMF grants are given under "Funding for Research and Technology Transfer".

It may be possible to obtain funding from the Agricultural and Marketing Research and Development Trust (AGMARDT) by means of an Industry Support grant to assist industry development of quality management systems. More details of these grants are given under "Funding for Research and Technology Transfer".

Development of industry quality management systems also fits the criteria for the Sustainable Farming Fund Grants, which are described under "Funding for Research and Technology Transfer".

Resources

  1. Information on AGMARDT's Industry Support Programme is available at its website, which provides a link to a simple on-line industry enquiry form. If the Trustees approve this you will be asked to submit an Industry Support Grant Request, which will be sent to you at that time.
  2. Details of the Sustainable Management Fund criteria, application process, projects funded to date and a downloadable application form can be found on the Ministry for the Environment website at http://mfe.govt.nz/withyou/funding/smf/ . Additional information can be obtained from the Senior Contracts Advisor for the SMF at: phone (04) 917 7401; fax: (04) 917 7523; email: murray.bell@mfe.govt.nz.
  3. The Sustainable Farming Fund page on the Ministry of Agriculture and Forestry website at http://www.maf.govt.nz/MAFnet/issues/sustain/sff2001.htm provides information on the eligibility of applicants and projects and the criteria by which projects will be assessed. The application form and guidelines are downloadable from this site or may be requested by email from sffund@maf.govt.nz or by mail from: Sustainable Farming Fund, C/o Ministry of Agriculture and Forestry, PO Box 2526, Wellington.
  4. The AgriQuality New Zealand Ltd website, http://www.agriquality.co.nz /, provides information about its quality assurance and certification services as well as contact details.
  5. The MAF website provides information on the standards that exist for the sector. Some standards are available on-line although not all have yet been translated for the web. If you have queries not covered by standards available on the site, contact details are provided for MAF staff able to assist.
  6. "Contacts in Agriculture", an annual publication listing contact details for a large range of organisations involved in the agricultural and horticultural sector or providing services to the sector can be ordered on-line at http://www.contacts.co.nz/ . It can also be ordered by phone ((03) 573 4471), fax ((03) 573 4472).

Market Information/Market Development

As an industry group you may:

  • Be considering the provision of market information on an initial or on-going basis for your members;
  • Require market information on the product of your industry to incorporate into your business planning;
  • Intend undertaking generic market development activities for the New Zealand industry as a whole.

Assistance in Acquiring Information or Undertaking Market Development

The New Zealand Trade Development Board (Trade NZ) can assist your organisation with information on most aspects of international markets and exporting. It offers a range of services to exporters, a number of which may also be of value to industry organisations, either as part of a market development strategy or in the provision of industry information to its members.

Useful services include the free provision of country profiles on over 100 countries with which New Zealand has export links and information about the export environment. On behalf of individual customers Trade NZ will undertake market research on the product of the industry that could include market trend data, market snapshots, consumer profiles, regulatory checks, etc. While you will be charged for this work, Trade NZ is partially Government funded, which allows it to provide customer services at a lower cost than private sector consultants. Details of the full costs involved will be advised at the outset. It may be possible for a sector specialist from Trade NZ to speak to your organisation early in its development to advise you on strategic direction, etc.

In addition, there are a number of private sector consultants who can be employed to assist in marketing areas. As there is no professional registration of such consultants, that will provide you with assurance that their work meets an appropriate standard, useful methods of checking on the suitability of consultants include contacting referees, seeking advice from your local economic development agency and checking for Trade NZ accreditation.

Economic development agencies that are members of "Economic Development Agencies of New Zealand, ECANZ, are listed in the list of contacts and other information at the end of this section. However, there are some that remain outside this organisation and it is worth checking with your local authority if the EDANZ list does not provide a contact in your area.

Funding for Market Development Activities

In general, Trade NZ is not a funding organisation, although it does offer subsidies of up to 50 percent on approved costs of attendance at trade fairs, under its "Export Networks" programme. An industry group could be part of such a network. In addition to subsidising attendance costs, Trade NZ would also assist with pre-event publicity, ensuring the group was able to meet appropriate people, etc.

Industry New Zealand, under its Enterprise Awards Scheme (Marketing Strategies category) can provide funding to small businesses to assist with market research/new market investigation (domestic and international markets), preparation of marketing plans and stand hire at international trade fairs. A "business" is not strictly defined in this context and funds from this source may be available for an appropriately designed project put forward by an industry organisation. Up to $20,000 per year can be granted to a single applicant and grants are made on the basis of a 50:50 reimbursement of eligible costs. Such funds may be used to help meet the costs of Trade NZ services.

For organisations wishing to develop an e-commerce or e-business strategy for their industry, assistance with the costs of development may be given under the "E-commerce and e-business strategies" category of the Enterprise Award scheme on the same basis as the grants for marketing strategies. The costs of installation and web-site design and maintenance are not eligible for this grant.

The Agricultural and Marketing Research and Development Trust (AGMARDT) includes generic marketing initiatives amongst the projects which may be supported by its "Industry Support" programme. Most grants that would be offered under this programme will be of between $5,000 and $50,000 and the Trustees prefer that the industry group also makes a cash contribution towards costs, as an indication of commitment to the project. Applications for grants under this programme can be made at any time of the year.

The first category under which Sustainable Farming Fund grants may be made is " Adding value and making market connections". This scheme has been described under "Research and Development".

Resources

  1. Information on the services offered by Trade NZ can be viewed at its website on http://www.tradenz.govt.nz . For those wishing to make enquires about eligibility, likely costs, or how to access the services, the Trade NZ hotline (0800 555 888) is the most appropriate place to start.
  2. An overview of the Enterprises Awards is given on the Industry New Zealand website at http://www.industrynz.govt.nz/sme/sec03_enterprise_awards.html , which also provides links to the scheme guidelines and application forms. A brochure is available from Industry New Zealand, PO Box 2878, Wellington. It would be valuable to discuss the project you wish to fund with Enterprise Award scheme staff (04 495 5080) before proceeding.
  3. Information on AGMARDT's Industry Support Programme is available at its website on http://www.agmardt.org.nz/industry1.htm , which provides a link to a simple on-line industry enquiry form. If the Trustees approve this you will be asked to submit an Industry Support Grant Request, which will be sent to you at that time.
  4. The Sustainable Farming Fund page on the Ministry of Agriculture and Forestry website at http://www.maf.govt.nz/MAFnet/issues/sustain/sff2001.htm provides information on the eligibility of applicants and projects and the criteria by which projects will be assessed. The application forms and guidelines are downloadable from this site or may be requested by email from sffund@maf.govt.nz or by mail from: Sustainable Farming Fund, C/o Ministry of Agriculture and Forestry, PO Box 2526, Wellington.

If you have any queries about the scheme you are advised to telephone MAF ((04) 894 0100) and ask to speak to a staff member in the SFF section.

Legislation to Assist Industry

Most industry organisations do not make use of legislation such as the Commodity Levies Act (1990) or the HEA Act (1987) until the industry has a sound production base and, in the case of the HEA, is proposing to export in the near future. However, if you consider that this legislation will be of value to your industry in future, establishing appropriate industry structures, developing industry databases and the co-operation of the industry as a whole, at the beginning will make it easier for you to meet the requirements of the Acts in future.

The New Zealand Horticulture Export Authority

The HEA Act allows an industry to form a Recognised Product Group under the Horticulture Export Authority, provided the Ministers of Agriculture and Foreign Affairs approve its application, and that the industry as a whole (growers, exporters and other participants) supports it. The HEA Act allows industry to develop a framework for self-management, and creates a forum for all its sectors to join together in determining the direction of the export industry. Product groups develop

an Export Marketing Strategy (EMS), which is enforceable under the Act that outlines the strategic direction of the industry. The EMS may incorporate industry quality standards, particularly those relating to food safety and chemical residues. In addition, only exporters licensed by the HEA may export the product of the industry and they must follow the EMS, or risk losing their licences. Any exporter who meets the criteria specified under the Act is eligible to be granted a licence by the HEA although the HEA must first ask the Recognised Product Group its views. Product groups are able to generate income to finance industry activities such as research and market development by charging for the services they provide to members.

A copy of the HEA's "Procedure for New Product Groups Seeking Recognition under the HEA Act 1987" is included in the final section of this document. HEA staff members are happy to discuss with new industry groups the suitability of the HEA framework for their industry later in its development. A product group may be formed before the industry starts to export although it must make provision for the representation of exporters. The range of industries that may adopt the HEA framework extends beyond those commonly considered to be "horticultural", to a wider range of plant-based industries. Staff members are happy to discuss the steps you may wish to take in the early stages of organisational development in order to facilitate becoming a Recognised Product Group later. They also stress the importance of involving HEA from the start of the application process so that your organisation does not waste resources preparing and submitting an application that does not meet the criteria required for Ministerial approval.

Resources

The HEA "Export Marketing Guidelines" can be obtained by telephoning ((04) 918 1964) or emailing Janet Skilton, the Executive Director at janet@hea.co.nz or faxing ((04) 918 1971).

The Commodity Levies Act (1990)

The Commodity Levies Act was passed in 1990 to provide a mechanism for primary industries to impose levies on producers in order to fund a wide range of activities, with the specific exception of any commercial or trading activity. A Levy Order is valid for six years. The industry may re-apply for another order.

The Act sets out the conditions under which levy orders can be made, including conditions relating to consultation and voting on the proposed levy. It also sets out the operational details that must be specified by the order, the impacts of the order, the uses of levy money and the duration of the order. The levy order requires the support of the majority of the producers (in terms of both numbers and production) who participate in an industry referendum.

Applying for a commodity levy order is a time consuming and costly process so it is most important to do it correctly the first time. The Ministry of Agriculture and Forestry (MAF) has prepared a detailed "Users Guide to the Commodity Levies Act" that sets out:

  • The things an Industry Organisation should do before applying for a compulsory levy
  • Making an application
  • Requirements of the organisation after the Levy Order has been made
  • The process for making a Levy Order
  • Example ballot paper.

In addition, industry organisations that are considering a Levy Order application are advised to contact MAF at the outset to discuss the process and the steps they should take.

Resources

  1. The "Users Guide to the Commodity Levies Act 1990" available in downloadable form from the MAF website at http://www.maf.govt.nz/MAFnet/index.html.
  2. The MAF staff member to contact when you are considering applying for a levy is: Prakash Narayan, MAF Policy, phone (04) 498 9854, fax: (04) 473 0118, email prakash.narayan@maf.govt.nz .
  3. A paper on the experiences of industry organisations and participants with making and operating Levy Orders – MAF Policy Technical Paper # 99/8 "Industry Views on the Making and Operation of Levy Orders under the Commodity Levies Act 1990" by Glen Greer, Jon Manhire, Tony Zwart (March 1999) is available on the MAF website at http://www.maf.govt.nz/mafnet/publications/techpap.html.

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Contact for Enquiries

Rural Affairs Coordinator
Sector Performance Policy
MAF Policy
Ministry of Agriculture and Forestry
PO Box 2526
Wellington
NEW ZEALAND

Phone: +64 4 894 0675
Fax: +64 4 4 894 0745
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