Export fees: Agriculture Minister David Littleproud responds to call to delay 50 per cent price hike

Federal Agriculture Minister David Littleproud has responded to calls from exporters facing price hikes of more than 50 per cent, as the Government pushes ahead with the new charges.

Horticulture exports will be among those hardest hit by the Federal Government’s proposed fee increases.

The Federal Government appears intent on pressing ahead with increasing export costs by more than 50 per cent from July 1, despite calls from industry to delay the price hikes.

Horticulture, dairy and live animal exporters will be hit with doubled admin costs from next month, in a move the sectors say will hurt farmers and damage Australia’s competitiveness in global markets.

But Agriculture Minister David Littleproud gave no indication he was inclined to delay introducing the new charges.

“It is appropriate and fair that industry repays the Australian taxpayer for the services they use, especially when some are paying the full costs and others paying less than half,” Mr Littleproud told The Weekly Times.

“I have also made it clear to the department they need to streamline their costs and reduce the regulatory burden.”

Mr Littleproud also argued many claims around the cost increases were “disingenuous and found to be incorrect” but did not provide examples. The Weekly Times has sought further comment on this statement.

The increases are due to a Federal Government overhaul of its export certification fees and charges, as it makes export certification fully cost-recovered for all ag industries by 2024.

Horticulture producers and exporters – already contending with high freight costs, labour shortages and weak domestic prices due to low export demand – are calling for the Government to hold off on introducing the changes until more thorough and “genuine” consultation can take place.

“When the Government’s narrative is around a trade-led recovery from Covid, now is the worst possible time to be adding additional costs to exporters’ bottom line,” AUSVEG chief executive Michael Coote said.

“We want to pay a fair price for a commercial service level, but a massive increase at such short notice doesn’t allow businesses time to recover.”

Though the cost increase were first flagged in February, the proposed changes were not released until May 14, with consultation closing this Thursday – leaving just two weeks for any feedback to be included and changes approved by Mr Littleproud in time for the July 1 start date.

The Department of Agriculture, Water and Environment says discussions on cost recovery and price increases have been underway since 2019, and that there have been no legislative increases since 2015, with some prices staying the same since 2009.

Figures from the department shows export arrangement costs have blown out by $43.7 million as of 2019-20 – including $12.1 million for live exports, $2.4 million for horticulture and $1 million for dairy.

A department spokeswoman said a $328.4 million package to reduce red tape for ag exporters – announced last year – would ultimately see fees and charges reduced by $21.4 million by 2024.

PRICE HIKES TO HARM HORTICULTURE EXPORTS

That reduction won’t be felt in exporters’ day-to-day regulatory costs, however. The Government proposes stepping up export fees and charges each year for each sector, until it is fully cost-recovered.

For meat, seafood and grains, the changes are less than 1 per cent of the export value, leading to modest increases over the four years.

But for horticulture, the rise is higher. Annual grower/exporter registration will jump from $600 to $913 on July 1, and complex registrations will go from $6000 to $9130, capping out at $11,571 by 2024.

Australian Fresh Produce Alliance chief executive Michael Rogers said while the department argued the overall changes were just 1 per cent of export value, that translated to as much as 20 per cent of a farmer’s export earnings.

Mr Rogers said the changes meant farmers would be paying more than $1 million to cover department incidentals such as office space and IT.

“At the same time that the Australian Government is claiming to support Australian farmers, the

Government is doubling export fees and charges,” Mr Rogers said.

“If the Government is determined to apply cost recovery arrangements to every Australian business, then those costs must be the direct costs of providing a service not the costs of departmental officers.”

Mr Coote said low-value, high-volume exports such as carrots and potatoes would be among the worst affected.

“Any cost increase at the current time for exporters is only going to make them less competitive in international markets,” he said.

Mr Coote said the rushed, four-week consultation period ahead of the July 1 start date was not comprehensive enough for such a drastic change.

The department spokeswoman said consultation had included 14 sessions across all export industries, and that there would be further reviews of each cost-recovery arrangement in 2022.

DAIRY, LIVE EXPORTS ALSO IN FIRING LINE

Live exporters are copping the biggest increases, largely due to the increased regulation of the industry following the 2018 live sheep scandal.

Annual export licence costs will more than double from $25,000 to $65,998 on July 1, reaching $106,551 by 2024. Sea shipment approvals will jump from $20,000 to $50,163, and air from $10,000 to $25,000

Australian Live Exporters Council chief executive Mark Harvey-Sutton said the increases would mean the industry would struggle to remain competitive, particularly with the challenges already faced during Covid with freight costs and high cattle prices.

“The reality is, consultation or not, what’s lacking (from the department) is a focus inward on making sure costs are as low as possible for industry,” Mr Harvey-Sutton said.

“We were quite rightly considered an essential service during Covid – then to be confronted with this …”

Small dairy exporters annual fees will rise from $7729 to $11,177, peaking at more than $16,000 in 2024; while costs for larger exporters will rise by $2000 next month, reaching about $9000 over four years.

The Australian Dairy Products Federation said though the increases were high, the announcement was not unexpected, and provided no further comment.