4. Facilitating Market Access
This category provides information that will assist in developing and implementing policies that help to facilitate the access of New Zealand's agricultural, horticultural and forestry products to overseas markets. Trading opportunities for these products are affected by many distortions. These include not only the more direct obstructions to access such as tariffs and non-tariff measures (e.g. sanitary and technical barriers to trade, administration of tariff quotas) but also the use of export subsidies and domestic support policies to assist competing producers.
The animal welfare proposals covered and funded under this category have been separated out into the combined chapter eight for ease of access (FMA113; 114; 115; 116; and 118).
4.1 FMA 111
Programme Title: |
Review of phytosanitary issues relating to soil on commodities being traded internationally. |
Programme Leader: |
Dr John Marshall |
Institution: |
Crop & Food CRI |
Programme Goal: Carry out a critique of current status of soil as a perceived quarantine risk and identify inconsistencies of approach for differing product groups. Develop an assessment protocol based on rational consideration of product fate, to determine whether there are acceptable levels of soil contamination on different product groups. Rationalization of the treatment of soil as quarantine risk should benefit New Zealand trade though improve market access.
Rationale: Soil is identified by our trading partners as having quarantine risk when associated with imported produce. Almost universally there are restrictions associated with soil.
In many cases there is demonstrable selectivity of quarantine risk relating to the amount of soil and the type of produce to which it is attached with numerous inconsistencies. For instance, flower bulbs are permitted to carry a defined amount of soil and these bulbs will generally be propagated at their final destination. Propagation of imported produce presents the greatest opportunity for disease and pest establishment as the host and potential pest/pathogen remain intimately associated. On the other hand, washed carrots have zero tolerance, but the washing process means they will have, at most, minute quantities of soil associated with them. In addition, they are neither propagated nor are they likely to enter the importing country's area of comparable production.
The marketing of potatoes offers similar inconsistencies. Seed potatoes are not washed and enter trade with associated soil, whereas in some markets table potatoes must be washed. Washed tubers still have a higher potential for loading of soil than washed carrots as the carrots are skinned during washing, whereas potatoes may not be skinned.
In addition, while peat is not soil in the strict sense of the term (i.e. soil includes some minerals) it will be considered in this study as it is incorporated into growing media and comes into intimate contact with the potential host.
The disposal of waste is an important consideration in assessing the overall risk of the establishment of potential pathogens in a new environment. There is also a need to consider potential eco-type risks in soil from differing regions, e.g. servicing a tropical region will present a much lower risk to a temperate country than products produced in a temperate region and destined for a similar eco-type.
There is potential to develop a more rational view of soil as a quarantine risk. This concept focuses on the fate of the product at the end of the market chain rather than the presence or absence of soil particles.
Objective 1
Objective Title: |
Current risk management practices |
Research Leader: |
J W Marshall |
Description:
Review all existing agreements and protocols relevant to the setting of risks that soil presents to trade.
Aim to gain a comprehensive understanding of the current situation and identify key philosophical and technical reasons for soil being treated as a risk material. The outcome will be a concise, accessible report on the basis for risk relating to soil and impacts on trade.
Methodology:
We will use existing conditions of trade documents (PRA, sanitary and phytosanitary agreements, ICPR), web based information and published material that refer to the presence of soil as a contaminant of exported and imported produce. We will analyse statements and identify the primary technical source of these statements. We will obtain the technical justification documents and critically review the appropriateness of the restriction.
After completing this process, we will develop a position document identifying the issues that have contributed to the current position.
Objective 2
Analyse importing country's restrictions and identify inconsistencies for differing product groups.
Objective Title: |
Inconsistency analysis |
Objective Leader: |
J W Marshall |
Description:
Aim: Identify inconsistency in regulations and risk assessments. Preliminary investigation has highlighted inconsistencies in the treatment of contaminating soil on differing classes of produce. A formal examination may disclose potential pathways for the development of a rationalisation of the treatment of soil as a risk to trade.
Methodology:
Working from the database developed in Objective 1, we will identify inconsistencies and correlate the relationships between product type, country and assessed risk.
Objective 3
Develop basis for assessment protocol based on rational consideration of product fate dictating tolerance to soil as a contaminant.
Objective Title: Rational response to soil
Objective Leader: J W Marshall
Description:
Develop a new paradigm for considering soil as a phytosanitary risk.
Methodology:
Subject to the discovery of information and data to support this objective, a new approach for the consideration of soil as a phytosanitary risk will be developed. In the first instance it will based around reconsideration of the fate of the product and discard pathway. A revised risk profile will be developed based on the risk potential of the product/soil complex, rather than on the ability or otherwise to decontaminate the product.
4.2 FMA 119
Programme Title: |
Level 3 Post Entry Quarantine |
Programme Leader: |
Bruce Koller |
Institution: |
Nimmo-Bell Consultancy |
Programme Goal: Provide recommendations for the establishment of a business to provide a Level 3 Post-Entry Quarantine (L3 PEQ) System to serve New Zealand's agricultural and horticultural sectors that:
- provides expected benefits to stakeholders;
- is economically sustainable and cost-effective;
- meets all costs and provides for future needs;
- enhances New Zealand's domestic and international trading position;
- does not compromise biosecurity; and
- specifies the role of Government.
Failure to provide cost-effective and efficient L3 PEQ facilities and services will encourage people to smuggle plant material into New Zealand violating our biosecurity provisions and potentially compromising our economic well-being. From a positive perspective - there has to be a system in place and available to the individual user at reasonable cost which encourages compliance.
Objective 1
Objective Title: |
Identify and describe the nature of market failure in the current provisions for L3 PEQ. |
Research Leader: |
Bruce Koller |
Description:
Market failure occurs when the market does not provide efficient outcomes in addressing demand (stakeholder needs) and supply (facilities currently available). The outcome of Objective One is to establish the extent of the demand-supply gap, determine if there has been market failure, and if so the reasons behind that market failure.
To achieve the outcomes sought in this objective, Nimmo-Bell will:
a. Explore dimensions of demand by:
- conducting a historical review of the provision of L3 PEQ services and facilities under MAF and subsequently under AgriQuality. Account will be taken of Nimmo-Bell's work relating to the establishment of AgriQuality and subsequently on the biosecurity Surveillance system;
- consulting stakeholders (see Appendix One) to ascertain;
- present and estimated future demand for Level 3 PEQ facilities;
- experiences to date in using Level 3 PEQ facilities - including use of off-shore facilities;
- views on essential features to be taken into consideration in developing the business model for future services;
- quantifying past demand by identifying plant imports that required L3 PEQ services and facilities and data mining MAF's plant import permits database and historical volume of L3 accession; and
- translating demand into L3 production units of quarantine facility (area, size, special containment features, and number of days) and diagnostic capacity (testing hours). Diagnostic capacity can be subdivided by scientific expertise (e.g. virology, bacteriology, mycology, entomology, plant physiology and plant pathology) and by test protocols for different plant types (e.g. potato, grapes, avocado, kiwifruit, summerfruit, and pipfruit), pathogens and pests.
b. Explore dimensions of supply and demand-supply gap by:
- documenting the proportion of demand fulfilled by MAF-accredited onshore and offshore providers; and
- establishing minimum L3 PEQ requirements (facilities and services) after determining demand and considering existing supply capacity.
Determine past costs and benefits for each of the stakeholders and the extent of any market failure.
Objective 2
Objective Title: |
Examine the model outlined in the Terms of Reference and explore the assumptions around the proposed partnership. |
Research Leader: |
Bruce Koller |
Description
To achieve the outcomes sought in this objective, Nimmo-Bell will:
a. Develop a range of business model options after evaluating the demand-supply gap against best practice models by:
- assessing onshore facilities - existing providers including Riversun, HortResearch and Crop & Food and any comparable L3 PEQ systems for animals, forestry and/or fisheries;
- assessing offshore systems in Australia and USA; and
- exploring feasibility of MAF-proposed public-private partnership.
b. Optimise stakeholder buy-in by addressing concerns in the areas of:
- affordability;
- commercial sensitivity;
- location and accessibility;
- biosecurity integrity; and
- availability of necessary legislation, regulations, protocols (IHS) and scientific expertise.
c. Identify the key financial variables for a successful business model including:
- capital infrastructure and overheads - containment and diagnostic facilities, land, equipment and staffing;
- marginal costs relating to throughput of accessions; and
- demand variability between years, seasons and industries.
d. Determine appropriate costs and benefits for each of the key stakeholders.
e. Evaluate the business model options to identify a preferred solution.
This type of feasibility work is our core business. Our focus on the benefits to the Government, Industry and Private Sectors (from the importation of the best genetic material available in the world) will ensure the respective funding roles evolve logically.
Objective 3
Objective Title: |
Develop a system of governance for a business that would be positioned to meet the goal described in the Terms of Reference. This system should be sufficiently flexible to include both existing and new private stand-alone businesses as part of the "system". |
Research Leader: |
Bruce Koller |
Description:
An effective system of governance will enable stakeholder input in developing the policies, accountabilities and resources for the cost-effective, efficient and sustainable operation of Level 3 Post Entry Quarantine facilities and services.
To achieve the outcomes sought in this objective, Nimmo-Bell will:
a. Develop options and recommendations for:
- a governing "Board", its composition, and the process of appointing members to that Board, and its responsibilities including reporting and disclosure;
- the necessary legislative and regulatory framework to authorise the proposed business model selected, the services and facilities to be provided, and the funding;
- a management structure, and the accountabilities and responsibilities for the operation of the proposed services and facilities including remuneration; and
- means by which the Board could obtain the information necessary to develop long term strategies and the resources needed to provide services required by present and prospective users, and to manage the risks of possible future market failure.
b. Determine appropriate costs and benefits for each of the key stakeholders arising from the proposed governance system.
In summary, the governance section will address:
Ethical conduct Reporting and disclosure Risk management Shareholder relations |
Board composition and importance Remuneration Auditors Stakeholder interests |
Objective 4
Objective Title: |
Evaluate the feasibility and appropriateness of the proposed locations, including an assessment of the area of land required. |
Research Leader: |
Bruce Koller |
Description:
To achieve the outcomes sought in this objective, Nimmo-Bell will:
a. Develop feasibility and appropriateness criteria through the analysis of critical success factors, critical failure factors and the related costs and benefits.
b. Evaluate each of the sites listed in the Terms of Reference using the preferred business model and the criteria developed, and visit two sites. Further site visits will evolve once the criteria are established, and in discussion with MAF Policy.
c. Assess the feasibility and relative benefit of sites other than those listed (depending on information gathered during the consultancy).
Conduct a workshop in Wellington of selected stakeholders to obtain further input to the preferred business solution, and the respective funding roles.
Objective 5
Objective Title: |
Determine the respective funding roles of participants in the system (including those intending to use it), as well as specifically proposing the role of government expenditure in achieving the goals described in the Terms of Reference. |
Research Leader: |
Bruce Koller |
Description:
The aim is to assess the "benefit value" to the respective stakeholders and therefore their contribution to the costs of the provision of the system, the facilities and the necessary capacity. Costs relate to the:
- provision of the system, the facilities and the necessary capacity - the "establishment component"; and
- usage of the system and the facilities - the "user pays" component;
- provision for future needs.
The business solution used will enable new users to be included at various times in the future and to contribute, on an annual basis, to the provision of the system and the facilities.
To achieve the outcomes sought in this objective, Nimmo-Bell will:
a. Identify benefits to recipients in the business model which may include:
- Government - for biosecurity, policy component and avoidance of market failure;
- industry - for `industry good' component; and
- individuals - for the ability to import plant materials.
b. Determine funding contributions by establishing a matrix that matches:
- stakeholder's contributions to the establishment component in line with their expected benefits of having the system and facilities; and
- users' payments for access to the facilities such that marginal costs are met and compliance is encouraged (i.e. smuggling is avoided).
Provide Government with a business plan to inform decision making on the establishment of Level 3 Post Entry Quarantine facilities. Information will be available to support quantifying the benefits and contribution required for the establishment of the service and the subsequent annual cost to achieve the ongoing outcomes that are required by Government, and the industry groups.
Contact for Enquiries
Farm Monitoring Programme Manager
Monitoring and Evaluation
MAF Policy
PO Box 2526
Wellington
NEW ZEALAND
Phone: +64 4 894 0623
Fax: +64 4 894 0741
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