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Friday, 28 November 1986
Page: 4073

(Question No. 4980)

Mr Hunt asked the Minister for Primary Industry, upon notice, on 28 November 1986:

(1) What is the approximate annual gross expenditure by farm producers on agricultural chemicals.

(2) What proportion of cash costs does agricultural chemicals represent for the industry, (a) wheat industry, (b) all grains industries, including wheat, (c) cotton industry, (d) fruitgrowing industries and (e) all primary industries.

(3) What tariffs were applicable to imported chemicals used on-farm as at 1 January 1986 and what revenue was being raised from these tariffs.

(4) What tariff levels will apply as at 1 January 1987 and what revenue is this expected to raise.

Mr Kerin —The answer to the honourable member's question is as follows:

(1) It was recently estimated in the Industries Assistance Commission (IAC) report on `The Chemicals and Plastics Industries', 30 May 1986, that around 70 per cent of agricultural chemicals are sold to the rural sector, suggesting a market with a value of about $220m in 1983/84.

(2) In 1983/84, expenditure on agricultural and veterinary chemicals made up almost 5 per cent of total farm cash costs on average, with wheat about 6.5% and horticulture (including fruitgrowing) about 6.7%. (See Table A14.5 prepared by the Bureau of Agricultural Economics (BAE) and included in the IAC report at page 420). In addition BAE survey data indicate expenditure on agricultural chemicals within the cotton industry in 1983/84 at 16.6% of total farm costs.

(3) The general rate of tariffs which applied to imports of finished chemicals and primary chemicals (used in further processing), which appear under several tariff items, ranges between 0 to 30 per cent.

Revenue figures for tariffs raised on imported chemicals used on farms are not available. The classification of tariff items tends to be compound specific rather than end use descriptive and as agriculture chemicals comprise a number of chemical compounds, listed under separate tariff codes, calculations of revenue would require considerable resources.

(4) On 1 January 1987 tariff levels will be the same as currently applies. However, the Minister for the Department of Industry, Technology and Commerce announced on 30 October 1986 that a reduction in tariff rates to a level of 15% or below, would be phased in over a three to five year period from 1 February 1987. Some tariff levels currently below 15% will be increased to either 10 or 15% to eliminate certain anomalies.

The changes which have been announced are expected to reduce the overall level of tariffs on imported agricultural chemicals by some $2-4 million.