- Impact of agricultural change on rural communities - phase 2.
- Review of overseas experience in using compulsorily acquired funds to finance industry activities such as research, generic promotion and information collection and dissemination in agriculture.
- East Coast North Island Farm Business Survey
6. Promoting industry and rural community development
6.1 ICD 440
Programme Title: |
Impact of agricultural change on rural communities - phase 2. |
| Programme Leader: | Professor Richard Bedford |
| Institution: | Waikato University |
Additional work is being completed on the final report for this project and a summary is therefore unavailable for inclusion in this report. The results of this project will be included in the next Research Results report.
6.2 ICD 441
Summary
This programmed aimed to obtain and analyse information on international experience in changing the funding mechanism for agricultural industry activities to assist MAF in providing advice to Government. Information on international experience in changing the funding mechanism for agricultural industry activities was obtained and analysed with respect to the New Zealand situation. The project was carried out to support a broad review of producer boards and the use of compulsory levies in New Zealand.
The information was obtained from published and unpublished sources and by means of telephone interviews with senior government and industry personnel in countries where funds obtained directly from industry are used to fund generic activities.
No instances of changes to funding mechanisms that would provide insight into the likely impact of similar changes in New Zealand were identified. However, there were significant differences in the way in which levies are implemented and operated between New Zealand and other countries that may have relevance for the New Zealand situation. These include:
- A system of “refundable” levies, which must be paid but can be refunded, operates successfully in a number of Canadian provinces.
- New Zealand is unique is requiring regular referenda and unusual in requiring referenda at all.
- Most countries where mandatory levies are permitted require more state intervention in reviewing levy-funded activities than New Zealand.
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Background
In the face of on-going debate both nationally and internationally on the appropriateness of the producer board structure in New Zealand, an understanding of the impacts of any changes to the mechanisms by which New Zealand primary sector industry organisations obtain funds is essential. A review of the operation and effectiveness of the Commodity Levies Act 1990, which is used by New Zealand industry organisations to obtain funds for generic industry activities, has also been conducted for MAF by the researchers.
The goal of this project was to obtain, and analyse with respect to the New Zealand situation, information on international experience in changing the funding mechanism for agricultural industry activities, including research, etc which will be of value to MAF in providing advice to Government when it considers changes to funding mechanisms in New Zealand.
Approach & Outcomes
The project was undertaken by means of reviewing published material relating to changes in the funding of industry activities internationally, and by obtaining unpublished information from senior government and industry personnel in countries where industry organisations engage in generic activities using funds obtained from industry participants.
Although levies are used to fund generic activities in the primary sector in many countries, and most permit mandatory levies to be implemented for this purpose, there is relatively little published information on the manner in which these are implemented and operated. Most of the information was obtained from unpublished material and by means of telephone interviews of government and industry personnel.
South Africa, where recent deregulation has compelled a number of industries to replace mandatory with voluntary levies, was the only country identified where there had been widespread changes to funding mechanisms. The changes to the South African levies were too recent, and conducted in a political climate markedly too different from New Zealand’s, to provide insight into the likely impacts of a move to voluntary funding mechanisms in this country. However, while the study did not identify instances of countries changing funding mechanisms, differences were identified in the manner in which levies are implemented and operated in New Zealand, and in other countries in which they may have implications for the future operation of levies in New Zealand.
The system of “refundable levies” operated in a number of Canadian provinces may have relevance for the New Zealand. Under this system growers must pay the levy but may apply in writing at specified times for payments to be refunded. Low (2 – 5 percent) refund rates are experienced. New Zealand is unique in requiring industry organisations to incur the expense of a referendum every five years, with few other countries, except the US, routinely requiring referenda at any stage. However, most countries that permit mandatory levies do require regular reviews, conducted by state or provincial organisations or by independent researchers, of levy funded activities. New Zealand’s system involves considerable expense for industry organisations, but minimises government intervention in the way in which industries use compulsorily acquired funds.
Publications
Greer, Glen and Zwart, Tony (1999): Review of Overseas Experience in Using Compulsorily Acquired Funds to Finance Industry Activities. Unpublished report to MAF.
6.3 ICD 442
Programme Title: |
Agricultural sector debt and debt servicing. |
| Programme Leader: | Roger Wilkinson |
| Institution: | Landcare Research |
Additional work is being completed on the final report for this project and a summary is therefore unavailable for inclusion in this report. The results of this project will be included in the next Research Results report.
6.4 ICD 443
Programme Title: |
East Coast North Island Farm Business Survey |
| Programme Leader: | Rob Hayes |
| Institution: | AgFirst Consultants, Gisborne |
Additional work is being completed on the final report for this project and a summary is therefore unavailable for inclusion in this report. The results of this project will be included in the next Research Results report.
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