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Monday, 18 March 2013
Page: 2362

Mr RAMSEY (Grey) (16:03): Let me associate myself with those parting remarks from the member for Riverina. I was involved with the review of the Agricultural And Veterinary Chemicals Legislation Amendment Bill 2012 after being seconded to the relevant committee. Small business is the economic driver of this country. It is the biggest employer. If there is one consistent complaint when I talk to people in small business it is about ballooning regulation and red tape. I have lost count of the number of builders, electricians, workshop mechanics and shop proprietors in small communities who have told me that they have reduced the size of their business, sometimes to a one-person operation. Why? Because they were sick to death of the paperwork and added expense affecting their viability, eroding their profits and making their products more expensive as they either compete for space against imports or—as farmers do—sell into a world market that cares not for the cost of their production.

There is one thing that we should do above all others in this parliament: to adhere to the adage that we should endeavour to do no harm. If we are to inflict damage on a certain sector, there must be a clear-cut case that the good far outweighs the harm. In the case of the Agricultural And Veterinary Chemicals Legislation Amendment Bill 2012, that cannot be said. In fact, I am of the opinion that, as the bill currently stands, it has the ability to do more damage than good.

I presume I was drafted onto the committee because I have a quite recent past involvement as a user of chemicals in agriculture and as a farmer and as a representative on a number of agricultural research and extension organisations. There were 15 submissions to the inquiry and six organisations or individuals plus the department gave evidence on our single day of hearings here in Canberra on 4 February. Only one of those people who fronted the committee alleged any failure in the current procedures. Even then they did not present any evidence to support this point of view. The inquiry heard no evidence that Australia's current registration system is allowing dangerous chemicals to be sold in Australia under licence. In fact, we were told by the National Audit Office that the APVMA has reasonable arrangements in place to identify chemicals that require review and to prioritise the reviews according to the risk that they represent.

So the question is: why is the government preparing to bring in a mandatory re-registration process when the case has not clearly been spelt out that one is needed? What we heard was that the industry was annoyed with the ability of the APVMA to frustrate the ability for new applications to be decided upon in a timely fashion. The central aim of this bill is the introduction of mandatory re-registration of chemicals that currently hold registration—and some of these products have been used for decades without dispute. It was proposed that they be subject to a re-registration process every five to 15 years, depending on how someone within the APVMA assesses the amount of danger that particular product may pose to the environment or people.

Currently, there are around 10,000 formulations registered for use in Australia. Such changes would mean that the APVMA would be trying to process in excess of 2,000 applications a year. It hardly seems likely that this extra workload will speed up the process. Already we know there is a significant backlog because one of the key objectives in the bill states that is the case: there is an existing backlog.

The most concerning thing is the possibility of extra costs this will inflict upon the industry. In fact, the Deloitte Access Economics study found it would be, in direct costs, $8 million a year. It is very concerning that the APVMA and the department have done no cost-benefit analysis. And it is impossible to say, from the information, just how much it will cost farmers, because ultimately they are the people who will pay the price.

As I said, the estimate was $8 million in direct costs, but that does not include the collecting and collating of new information. So if a company was to face a mandatory renewal of registration—and it may be required to find new scientific information to back up the application—it would entail a cost directly to the industry, an extra cost which in the end must be passed on to the farmer.

The best reason the department could give—at least, by my judgement—for this mandatory registration was that other countries were doing it this way. There are many things around the world that I would not want to copy. In fact, Europe is held up as a shining example in many cases. There are so many things in Europe—considering their financial complications at the moment—that I think Australia definitely should not copy. In fact, some of the regulations they have around the reregistration of chemicals, which impose new costs or complications for farmers, may well be one of those.

It can be misleading. Australia is a major exporter of food, and is recognised as such around the world. About 71 per cent of our production is exported. In specific industries like wheat or beef we are one of the biggest players, but our agricultural sector by world standards is not that big—it is just that we export most of our production. Many of our industries are far smaller than those I have mentioned already, and they are little more than niche areas of production which market into a certain area. That means that the size of our agriculture sector is not significant in world terms. So a market for a certain chemical in our agriculture sector is not necessarily a viable opportunity for any company wishing to sell it.

A number of witnesses, including CropLife, GRDC and farmer groups raised the fact that chemicals with low sales may not be worth the sponsoring company spending the money on re-registration. In fact, they cannot recoup the investment required.

Dr Rohan Rainbow of the GRDC told the committee the European scheme this bill is seeking to emulate has led to the number of registered formulations falling from 945 to 336 in 10 years, and this equates to a 64 per cent loss in variety of products available across the sector over that time. That is not because they were necessarily seen as dangerous; it was just, in the greater part, because the registrations were not renewed. We have no information to tell us exactly why this is, but it is highly likely it was the costs related to the renewal process—that those companies could not find a way to recover the amount of money they had to spend on the registration process for it to be worthwhile their going through with it.

The Australian market is just a fraction of the size of the European market so we do not know what the fallout would be. We should. As members of parliament, if we are to make an informed decision on this we should know exactly what those costs are for our agriculture sector. We should have that cost-benefit analysis but we are being asked, in this case, to vote in the dark, as it were.

In recent times the APVMA has been reviewing a number of chemicals. As an example I will focus on one that created quite a few headlines some 12 months ago. That chemical was diuron. Diuron has been used for more than 40 years—or probably closer to 50 years—around the nation. The initial recommendations from the APVMA were very concerning, largely because they were concerned about run-off into the marine environment. Farmers in my area were very alarmed.

My connections farm in an area of very low rainfall—I wish it were other!—with little run-off. We are hundreds of kilometres from the coast. In fact, should there be run-off it would drain inland into a salt lake environment. So it is very unlikely to do any harm to the environment. We use exceptionally low rates. Yet the initial recommendations were such that my farmers were very concerned they may be losing the use of a very valuable chemical. There were adjustments to the registration, and in the end the recommendations largely concentrated on the higher-rainfall areas and areas closer to the coast. But the issue created a lot of work for a lot of people in the industry to get back to basic common sense.

I am very concerned there is an opportunity for flare-ups of other non-commonsense proposals. So, like many, I have been calling for reform within the APVMA. Its lack of responsiveness has been a concern to me for some time.

I informed this House back in the 2011 that farmers across southern Australia—and within my electorate—were struggling with a mouse plague. Tens of millions of dollars, if not hundreds of millions of dollars, were lost to the industry as a result of this mouse plague. You need a bit of history here. There was a time when we used, in this country, strychnine bates to kill mice. Grain was treated with strychnine. One grain was lethal, and it worked very well. In somebody's wisdom, some years ago they removed strychnine for possible use on broad-acre agriculture. There were concerns not about damage to wildlife but about contaminating an export crop. There are many stories around about who was driving those concerns and whether they were put up for marketing purposes in the first place, but the long and short of it is that we lost the use of strychnine—a very good chemical. If it were reintroduced now, the cost has unfortunately blown out so it will make it quite difficult. Its recommended replacement is a chemical called zinc phosphide. Zinc phosphide is an S7 poison, so it needs to be handled with utmost care, but farmers are trained and educated in handling these chemicals.

There we were in the middle of a mouse plague and badly needed an emergency response, but the APVMA was very slow in moving to respond. In fact, that mouse plague was over gone—dead and buried, I might say, to use a phrase from somewhere else. It was long gone before we ever got the response out of the APVMA that we needed. At the time I said that there should be mechanisms within their operating structure to take into account the economic impact of non-action or the economic impact of withdrawing a chemical from the market, as well as taking into account the environment benefits of withholding those chemicals from the market, if you will. We should always have the full story. In fact, there is a very good simile: on a regular basis, the Pharmaceutical Benefits Advisory Committee needs to make decisions about the relative benefit of any proposed medicine for human use. It has to weigh up the dollars against the value the individuals in the electorate will get out of that particular registration. I think that is the kind of flexibility the APVMA should have.

I accept that there are parts of this bill that aim at making the APVMA a more responsive organisation, by setting time limits. Those are the parts of the bill that I broadly support. The amendments that the member for Calare has foreshadowed ask: firstly, that the 12-month mandatory renewable registration process be removed from the bill; and, secondly, that we take another 12 months to get the rest of this right, so we can get the extra things in the legislation that are needed and make sure that we get a responsive APVMA that is, above all, cost-efficient and does not pass extra costs and red tape on to our farming sector. The sector it is does not really make any difference; it is another small business in Australia that does not need extra costs.