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Rice Levy Bill 1991

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House: House of Representatives Portfolio: Primary Industries and Energy Purpose To impose a levy on rice produced in Australia to support research into the industry.

Background The earliest recorded commercial rice crops were grown by Chinese market gardeners in the Northern Territory in the 1890s. Rice was grown at Humpty Doo and Pine Creek to supply Chinese working on the goldfields. New South Wales has been growing rice commercially since 1924 and Queensland since 1967. 1 Currently, production of rice in Australia is centred on two geographic zones. In the Riverina District of South- western New South Wales, approximately 1 800 irrigated farms produce one crop per year, and typically harvest around 800 000 tonnes of rice. In North Queensland, the rice industry is centred on Home Hill and Mareeba, produces two crops per year and typically harvests around 25 000 tonnes of rice. 2 New South Wales produces all types of rice, including approximately one- third of the total production of long grain rice, but the main variety grown is Calrose, a medium grain rice type. Bluebonnet, a long grain rice, is the only variety grown in Queensland. 3

Australia produced 748 kilo tonnes (kt) of rice in 1988- 89, compared to 741 kt in 1987- 88. The gross value of Australian rice production in 1988- 89 was $133 million, compared to $117 million in 1987- 88. The average farm yield for rice in 1988- 89 was 7.71 tonnes per hectare (t/ha), compared to 6.99 t/ha in 1987- 88. Australia exported 338 kt of rice in 1988- 89, compared to 314 kt in 1987- 88. The value of Australian rice exports in 1988- 89 totalled $149 million, compared to $123 million in 1987- 88. The largest purchasers of Australian rice are Papua New Guinea, Hong Kong, the Pacific Islands, the Middle East and New Zealand. The Australian rice market is totally open to imports. Imports generally come from Thailand, India, Pakistan, the USA and Italy. Imports currently make up approximately 20% of the Australian retail rice market. 4 Statistics relating to the outlook for the Australian rice industry are contained in Table 1 below.

Table 1: Outlook for Australian Rice Industry 5

1989- 90 (p)

1990- 91 (s)

1991- 92 (f) Australian rice production

923 kt

786 kt

1 046 kt Gross value of Australian rice production

$124 million

$112 million

$160 million Average farm yield for Australian rice

8.02 t/ha

8.89 t/ha

8.43 t/ha Volume of Australian rice exports

424 kt

421 kt

462 kt Value of Australian rice exports

$185 million

$178 million

$200 million(Note:(p)=preliminary; (s)=ABARE estimate; and (f)=forecast)

Access to the Japanese market and allegations by a Japanese consumer group that Australian rice is contaminated with chemical residues has recently been the subject of media attention. Access for Australian rice producers to the Japanese domestic market could provide a significant boost for the Australian industry. The Japanese market consumes approximately nine million tonnes of rice per annum. Currently, entry into the Japanese market of Australian rice is prohibited.

The purpose of this Bill is to impose a levy on rice produced in Australia. In the Second Reading Speech to this Bill, the Minister stated that the proposed levy has been requested by the Ricegrowers Association of Australia and the Queensland Rice Marketing Board to raise funds for a research and development program for the rice industry. Funds raised by the proposed levy will be matched by the Commonwealth up to a maximum of 0.5% of the rice industries gross value of production.

Main Provisions `Leviable rice' is defined in clause 3 to be a rice variety that is specified in the Schedule of the Bill, or prescribed.

`State marketing authority' is defined in clause 3 to be the Rice Marketing Board for NSW, or the Rice Marketing Board for Qld.

A levy will be imposed on leviable rice produced in Australia and delivered to a processor (clause 5).

Clause 6 deals with the rate of levy. Subject to disallowance by Parliament, the rate of levy will be an amount per tonne set by the Minister up to a maximum of $2.00 per tonne. Different rates of levy may be set for different varieties of rice and for rice harvested in different seasons. The Minister is not to set a rate of levy unless it is a rate that has been recommended by the State marketing authority in which the variety of rice has been harvested.

The levy will be payable by the producer of the rice (clause 7).

References 1. Parliamentary Database, Australian Encyclopaedia. 2. National Agricultural and Resources Outlook Conference 1991, Australian rice - problems and prospects, p. 1. 3. Parliamentary Database, Australian Encyclopaedia. 4. National Agricultural and Resources Outlook Conference 1991, Australian rice - problems and prospects, p. 1. 5. Australian Bureau of Agricultural and Resource Economics, Agriculture and Resources Quarterly, Vol. 3, No. 2, June 1991, pp. 288, 291, 294 and 295, and 298.

Bills Digest Service 6 September 1991 Parliamentary Research Service

For further information, if required, contact the Economics and Commerce Group on 06 2772460.

This Digest does not have any official legal status. Other sources should be consulted to determine the subsequent official status of the Bill.

Commonwealth of Australia 1991.

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Published by the Department of the Parliamentary Library, 1991.