Prod­uct groups

Biose­cu­rity levy to be de­cided

NZ Grower - - Contents -

Toma­toes NZ Inc. Pota­toes NZ Inc.

More in­for­ma­tion about the pro­posal is out­lined on pages 39-43 and will be posted to To­ma­toesNZ mem­bers.

Af­ter the AGM and af­ter­noon tea, To­ma­toesNZ mem­bers are in­vited to com­bine with As­para­gus Coun­cil and Veg­eta­bles New Zealand mem­bers in at­tend­ing the fol­low­ing con­fer­ence ses­sions, run­ning con­cur­rently:

In­vest­ing in clean tech­nolo­gies:

Speak­ers Dr Paul Ben­nett, Sci­ence Leader for Clean Tech­nolo­gies and Dr Flo­rian Graichen Sci­ence Leader for Biopoly­mers and Chem­i­cals at Scion re­search Ro­torua, will dis­cuss how bio-fuel, bio-re­fin­ing, bioen­ergy, bio-waste and bio-poly­mer tech­nolo­gies be­ing de­vel­oped at Scion may be used by NZ grow­ers in the fu­ture.

In­no­va­tion for Sus­tain­abil­ity:

As­so­ciate Pro­fes­sor Jason War­gent of Massey Univer­sity will talk about Massey’s work har­ness­ing the power of UV light to grow hardier, more pest-re­sis­tant crops with longer shelf life and greater nu­tri­tional value. • The Miss­ing Link: Hir­ing from the pool of trained grad­u­ates: How do we as em­ploy­ers ac­cess the growing pool of hor­ti­cul­ture grad­u­ates, and what are the ben­e­fits of em­ploy­ing grad­u­ates?

The Hort NZ AGM will fol­low at 4:30pm and wel­come re­cep­tion at 6pm.

That evening the Veg­etable In­dus­try Din­ner will in­clude guest speaker Mike Sim of Biobees, on “10 things you didn’t know about bees”, and a chance to re­lax and net­work with other veg­etable in­dus­try peo­ple.

To­ma­toesNZ will help cover the costs of levy payer’s con­fer­ence at­ten­dance. A claim form has been posted to grow­ers and is avail­able for down­load on the To­ma­toesNZ web­site con­fer­ence page.

TO­MA­TOESNZ BOARD ELEC­TIONS RE­SULT Nominations for TNZ board elected mem­bers closed late last month. One nom­i­na­tion was re­ceived – for Jonathan Baker of Lit­tle Green­house Ltd, Lyt­tel­ton.

Cur­rent board mem­bers Ed Lee and An­thony Tring­ham re­tired by ro­ta­tion and were avail­able for re-elec­tion.

Long-serv­ing board mem­ber Tony Nor­ton re­signed from the board in May, and will step down at the AGM in July. That left a va­cancy on the board.

There­fore Ed, An­thony and Jonathan are ap­pointed, with­out the need for an elec­tion.

We are look­ing for­ward to wel­com­ing Jonathan to the board, and thank Tony Nor­ton for his ser­vice of 13 years on the To­ma­toesNZ board and its pre­de­ces­sor the Fresh Tomato Sec­tor Com­mit­tee.

The To­ma­toesNZ An­nual re­port and pa­pers for the AGM will be on their way to TNZ levy pay­ers in late June.

Next year we will also be ask­ing grow­ers to sup­port a new Com­mod­ity Levy Or­der for fresh toma­toes.

OP­ER­A­TIONAL AGREE­MENTS When To­ma­toesNZ first con­sulted on sign­ing the Gov­ern­ment In­dus­try Agree­ment for Biose­cu­rity Readi­ness and Re­sponses Deed (GIA Deed) way back in 2014, we com­mit­ted to giv­ing grow­ers fur­ther in­for­ma­tion be­fore we signed up to any “op­er­a­tional agree­ments” un­der the GIA Deed. Op­er­a­tional agree­ments are be­tween the Min­istry for Pri­mary In­dus­tries (MPI) and one or more in­dus­tries, and pro­vide for joint de­ci­sion-mak­ing and in­vest­ment. They are where “the rub­ber hits the road”, and we start com­mit­ting money and re­sources to biose­cu­rity readi­ness and re­sponse. >

Op­er­a­tional Agree­ments cre­ate a man­age­ment plan to:

• keep the named pest (or pests) out of NZ;

• iden­tify how to re­spond if the pest/s is/are found;

• how costs will be shared;

• and sets in ad­vance a fis­cal cap on spend­ing dur­ing a re­sponse.

Back in 2014, when fresh tomato grow­ers agreed to be­come GIA Deed sig­na­to­ries, there were no op­er­a­tional agree­ments in place and we did not know what they would look like for the tomato in­dus­try and what the costs were likely to be.

Now there is an Op­er­a­tional Agree­ment for fruit flies in place, and as a sig­na­tory to the GIA Deed we are in a po­si­tion to be­come a sig­na­tory to that Agree­ment. Cur­rent in­dus­try sig­na­to­ries to the fruit fly Op­er­a­tional Agree­ment are ki­wifruit, pipfruit, av­o­cado, veg­eta­bles and cit­rus.

To­ma­toesNZ has been “at the ta­ble” through­out the ne­go­ti­a­tions, which in­cluded de­cid­ing “cost shares” for sig­na­to­ries. We have com­mit­ted $23,000 in “vol­un­tary con­tri­bu­tions” to the cost of run­ning the readi­ness pro­gramme (in­clud­ing the fruit fly trap­ping sur­veil­lance net­work) for the 2017-18 year, which for now is be­ing paid from Com­mod­ity Levy. This amounts to 4.6% of the to­tal value of all in­dus­try con­tri­bu­tions to run­ning the readi­ness pro­gramme and op­er­a­tional agree­ment. This will be an on­go­ing an­nual cost.

Es­ti­mates for pos­si­ble “re­sponse” costs, should there be a fruit fly in­cur­sion, vary de­pend­ing on the level of the in­cur­sion and are out­lined in Ta­ble 1.

The re­al­ity is that the fresh tomato in­dus­try will be re­quired to pay a share of the cost of “readi­ness” (re­search, sur­veil­lance) and “re­sponse” (when in­cur­sions oc­cur) ac­tiv­i­ties, whether or not we do so up front and as a sig­na­tory to the Op­er­a­tional Agree­ment – be­cause MPI plans to “cost re­cover” from those in­dus­tries that ben­e­fit from this work but are not sig­na­to­ries. By be­ing a sig­na­tory, we get a say on how much it costs, and how it is car­ried out, to en­sure the max­i­mum ben­e­fit to fresh tomato grow­ers.

In ad­di­tion to fruit fly, an Op­er­a­tional Agree­ment for Brown Mar­morated Stink Bug is in the fi­nal stages of de­vel­op­ment. Cost shares are still be­ing ne­go­ti­ated but look likely to be lower than those for fruit fly be­cause there are more “ben­e­fi­ciary” groups, in­clud­ing a large “pub­lic good” com­po­nent, be­cause the pest is a pub­lic nui­sance and attacks many na­tive species.

The To­ma­toesNZ board will be ask­ing fresh tomato grow­ers to agree to give it the man­date to en­ter into Op­er­a­tional Agree­ments on their be­half, via a vote at the AGM on July 12th.

We have also started de­vel­op­ing a Fresh Tomato Op­er­a­tional Agree­ment which will cover off the top few pri­or­ity pests that are of the most con­cern to our in­dus­try, such as Chilli Thrips, Leafmin­ers, and viruses such as Tomato tor­rado virus and Pepino mo­saic virus. Some of these pests may be in com­mon with other in­door

or solana­ceous crops, and we will be talk­ing to those prod­uct groups about joint agree­ments and cost shares.

When there is no Op­er­a­tional Agree­ment in place for a spe­cific un­wanted pest that ar­rives in New Zealand, then MPI and in­dus­try Deed Sig­na­to­ries who are di­rectly im­pacted by that un­wanted pest would en­ter into a ‘rapid OA’ process to agree re­sponse cost shares and an Op­er­a­tional Agree­ment fis­cal cap. MPI will re­spond un­til the rapid OA is up and run­ning.

The To­ma­toesNZ board will be ask­ing fresh tomato grow­ers to agree to give it the man­date to en­ter into Op­er­a­tional Agree­ments on their be­half, via a vote at the AGM on July 12th.

A NEW BIOSE­CU­RITY LEVY ON FRESH TOMA­TOES

In Septem­ber last year, To­ma­toesNZ In­cor­po­rated signed up to the Gov­ern­ment In­dus­try Agree­ment for Biose­cu­rity Readi­ness and Re­sponse Deed (GIA Deed).

The Deed out­lines the prin­ci­ples of the part­ner­ships be­tween MPI and each in­dus­try that signs the deed. Sign­ing up to this agree­ment has meant that we have more of a say in how biose­cu­rity risks to our in­dus­try are man­aged. It means we have a “seat at the ta­ble” when de­ci­sions are made about whether to re­spond to new pests that will have an im­pact on fresh tomato grow­ers and ex­porters. It also brings us into a “part­ner­ship” be­tween the Min­istry for Pri­mary In­dus­tries and other hor­ti­cul­ture (and agri­cul­ture) sec­tors. That part­ner­ship means that we are talk­ing about and as­sess­ing po­ten­tial biose­cu­rity risks to­gether, and com­mis­sion­ing re­search and readi­ness plans that re­duce the chances of new pests es­tab­lish­ing. Since Septem­ber 2016, To­ma­toesNZ Chair Alas­dair Ma­cLeod, my­self, and con­sul­tant Gisele Irvine (Mar­ket Ac­cess So­lu­tionz) have been closely in­volved at the “GIA ta­ble”, and have been im­pressed with the high level of co­op­er­a­tion and open­ness among the sig­na­to­ries (in­clud­ing the Min­istry for Pri­mary In­dus­tries - MPI), who are keen to work to­gether to achieve the best out­comes for all.

Along with this greater op­por­tu­nity for rep­re­sen­ta­tion, in­flu­ence, and shared work on biose­cu­rity readi­ness, comes a re­quire­ment to di­rectly con­trib­ute to the costs of run­ning biose­cu­rity readi­ness and re­sponse pro­grammes.

At the mo­ment we are fund­ing the “min­i­mum com­mit­ments” of be­ing a Deed sig­na­tory from Com­mod­ity Levy funds. Min­i­mum com­mit­ments in­clude tak­ing part in gov­er­nance, de­vel­op­ment of Op­er­a­tional Agree­ments (e.g. Fruit Fly and Brown Maro­morated Stink Bug); and de­vel­op­ing To­ma­toesNZ’s biose­cu­rity re­sources, such as de­scrib­ing and pro­vid­ing in­for­ma­tion about our in­dus­try’s “pri­or­ity pests”. Now that Op­er­a­tional Agree­ments are be­ing de­vel­oped and signed, the fund­ing com­mit­ments are ris­ing. As such, the To­ma­toesNZ board is propos­ing a Biose­cu­rity Levy on Fresh Toma­toes, with an ini­tial rate of 0.10% (10 cents per $100) and max­i­mum rate of 0.25% (25c per $100) of value at the first point of sale (for do­mes­tic sales) or the free on board value for exports (ta­ble 2). The Levy will only fund biose­cu­rity-re­lated ac­tiv­i­ties. It will not fund other non-biose­cu­rity To­ma­toesNZ ac­tiv­i­ties. This pro­posal will be voted on at the To­ma­toesNZ AGM on July 12th.

The To­ma­toesNZ board is propos­ing a Biose­cu­rity Levy on Fresh Toma­toes, with an ini­tial rate of 0.10% (10 cents per $100) and max­i­mum rate of 0.25% (25c per $100) of value at the first point of sale.

The To­ma­toesNZ board is propos­ing to use the biose­cu­rity levy to build a biose­cu­rity re­serve fund of about $120,000 per year (as­sum­ing no re­sponses need to be funded), with a cap of $1,000,000. This fund could be used to pay for re­sponse costs if and when they oc­cur, or for readi­ness ac­tiv­i­ties. If re­quired, the rate of levy could be moved up to no more than the max­i­mum (0.25%). This could hap­pen if mul­ti­ple re­sponses to fresh tomato pests oc­cur within a few years.

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As a GIA part­ner, To­ma­toesNZ has a seat at the ta­ble of “re­sponse gov­er­nance” for any new pests that af­fect fresh toma­toes; and there­fore have a say in how much will be spent in any re­sponse. MPI will cover the cost of a biose­cu­rity re­sponse ini­tially, and then cal­cu­late and in­voice each in­dus­try's share us­ing a pre-agreed cost share model and re­pay­ment terms which will be set out in Op­er­a­tional Agree­ments.

The Biose­cu­rity Levy on Fresh Toma­toes Or­der would be made un­der the Biose­cu­rity Act, and will be sep­a­rate and ad­di­tional to the 0.15%). Com­mod­ity Levy on Fresh Toma­toes. It will be levied on all New Zealand com­mer­cial toma­toes grown for ex­port and the do­mes­tic mar­ket. Cur­rently the Com­mod­ity Levy on Fresh Toma­toes is be­ing col­lected from all com­mer­cial tomato grow­ers at its max­i­mum rate of 0.35% (ex­clud­ing the HortNZ com­po­nent of

To date, only one GIA sig­na­tory (Ki­wifruit) has a Biose­cu­rity Levy in place which came into ef­fect in March 2017. A num­ber of other GIA sig­na­to­ries are plan­ning to ap­ply in the near fu­ture (in­clud­ing Onions NZ, Sum­mer­fruit NZ, and Veg­eta­bles NZ).

If the vote at the AGM is suc­cess­ful, then To­ma­toesNZ will pre­pare an ap­pli­ca­tion for a Biose­cu­rity Levy Or­der for Fresh Toma­toes. It is ex­pected the ap­pli­ca­tion and Levy Or­der draft­ing process could take up to 12 months be­fore com­ing into ef­fect. To­ma­toesNZ will no­tify grow­ers di­rectly when the Biose­cu­rity Levy is to be ac­ti­vated, through ex­ist­ing com­mu­ni­ca­tion me­dia in­clud­ing this mag­a­zine, the To­ma­toesNZ.co.nz web­site, grower fo­rums and meet­ings.

It is pro­posed that HortNZ would pro­vide a col­lec­tion ser­vice for the Fresh Tomato Biose­cu­rity Levy, and pass the funds on to Toma­toes NZ, just as they cur­rently do now with the Fresh Tomato Com­mod­ity Levy, with the two levies show­ing as sep­a­rate lines on grow­ers’ ac­counts (for those pay­ing the Levy through col­lec­tion agents). To­ma­toesNZ would re­port on Biose­cu­rity Levy in­come and ex­pen­di­ture in an an­nual re­port and at the an­nual gen­eral meet­ing.

More in­for­ma­tion on the Biose­cu­rity Levy and op­er­a­tional agree­ments will be sent to fresh tomato grow­ers in late June, and a vote ap­prov­ing the Biose­cu­rity Levy and op­er­a­tional agree­ment man­date will be held at the AGM on 12th July.

COM­MOD­ITY LEVY

The Com­mod­ity Levies Or­der (for Veg­eta­bles and Fruit 2013) un­der which To­ma­toesNZ is funded (along with HortNZ, Veg­eta­bles NZ and Process Veg­eta­bles NZ), ex­pires 12th May 2019. To en­sure con­ti­nu­ity of fund­ing, we will need to ap­ply for a new Com­mod­ity Levy Or­der by Septem­ber 2018. Now

that TNZ is an In­cor­po­rated So­ci­ety we will be re­quired to ap­ply for our own Fresh Tomato Com­mod­ity Levy Or­der, sep­a­rate to HortNZ.

The To­ma­toesNZ board plans to pro­pose that the ini­tial levy rate un­der a new com­mod­ity levy or­der for fresh toma­toes will be the same as the cur­rent levy rate; 0.35% (35 cents per $100 of sales), which is also the max­i­mum rate un­der the cur­rent levy or­der. How­ever the board also plans to pro­pose that that the max­i­mum levy rate un­der the new levy or­der be in­creased to 0.50% (50 cents per $100 of sales). On the cur­rent in­dus­try value of $120 mil­lion, the 0.35% levy rate raises $420,000 per year; and the higher levy rate would pro­vide a max­i­mum of $600,000 per year. Over the past six years, To­ma­toesNZ has been run­ning deficit bud­gets, with a small sur­plus last year and this year. This was a de­lib­er­ate strat­egy to re­duce the To­ma­toesNZ re­tained levy (“re­serves”) amount down from around $900,000 in 2013. We now have “re­serves” of $600,000, which the board felt is a more ap­pro­pri­ate fig­ure. The 0.50% max­i­mum would bring the max­i­mum rate back up close to where it was prior to 2013 (a max­i­mum of 0.525% un­der the 2007 levy or­der), and give the To­ma­toesNZ some room to in­vest in more re­search, in­dus­try de­vel­op­ment and ad­vo­cacy to sup­ports and man­age risk for grow­ers, should it be re­quired in the fu­ture. The rate would only move up from 0.35% by vote at an AGM, af­ter the com­mence­ment of the new levy or­der in around May 2019.

The Com­mod­ity Levy pro­posal will be fully con­sulted on in the first half of 2018, and a grower ref­er­en­dum will be held in around July next year. In the mean­time, the board felt it was ap­pro­pri­ate to flag the Com­mod­ity Levy pro­posal along­side that of the Biose­cu­rity Levy.

I would wel­come any com­ments and feed­back on these pro­pos­als. Please con­tact me at He­len.Barnes@HortNZ. co.nz or phone (04) 470 5666, or con­tact any of the To­ma­toesNZ Board mem­bers to dis­cuss.

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