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Grain Legumes Levy Amendment Bill 1992



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House: House of Representatives Portfolio: Primary Industries and Energy

Purpose To change the basis on which the research and development levy on grain legumes is imposed from a flat rate per tonne to an ad valorem rate.

Background 1 The major grain legumes produced in Australia are field peas, lupins and peanuts. Field peas have been a major rotational crop in southern Australian grain areas since European settlement. Field pea production in 1990- 91 totalled 309 kilo tonnes (kt), produced from an area of land of 309 000 hectares (ha), and valued $85 million.

Lupin production in 1990- 91 totalled 752 kt, produced from an area of 789 000 ha, and valued at $140 million. The major end use of lupins has been in the manufacture of pig and poultry feed although quantities of lupins are now being used in the preparation of high protein food for human consumption in Asia and Australia.

Peanut production in 1990- 91 totalled 36 kt (in shell), produced from an area of 22 000 ha, and valued at $40 million. In Australia, peanuts are grown mainly for human consumption, although small quantities of low quality peanuts are crushed for oil and vegetable meal. Peanuts are produced mainly in Qld, with only a small area grown in N.S.W., the N.T. and north- west W.A. In Qld, approximately 90% of the State's crop is grown in the Burnett area, principally around Kingaroy. The rest is grown on the Atherton Tableland.

Grain legumes research and development (RD) is financed by a grower levy and a contribution from the Commonwealth. The levy is imposed by the Grain Legumes Levy Act 1985 (the Principal Act). The levy is currently applied to the production of lupins, field peas, faba beans, chickpeas, mungbeans, peanuts and pigeon peas (leviable grain legumes). The operative rate of levy for grain legumes, other than peanuts and navy beans is $1.25 per tonne. This rate may be varied by regulation up to a maximum of $5.00 per tonne. Peanuts are levied at $2.00 per tonne and navy beans at $5.00 per tonne. Levy receipts are paid into an RD fund administered by the Rural Industries Research and Development Corporation. Funds raised by the levy are matched by the Commonwealth up to a maximum of 0.5% of the industry's gross value of production.

The principal effect of this Bill will be to change the basis on which the levy is imposed from a flat rate per tonne to an ad valorem rate, that is, a rate expressed as a proportion of the value of leviable grain legumes. It is reported in the Second Reading Speech to this Bill, that the change to the basis on which the levy is imposed is being implemented at the request of the Grains Council of Australia, and is intended to make levy collection arrangements more equitable. It is argued by the Minister that the proposed ad valorem rate will ensure that growers' contribution to RD will be proportional to their net return for the particular crop grown.

Main Provisions This Bill will have effect from 1 October 1992 (clause 2).

`Leviable amount' is defined by clause 3 to mean $50, or a prescribed amount.

`Value' is defined by clause 3 to mean the value as worked out in accordance with the regulations. A new section 7, that deals with the rate of levy, will be substituted into the Principal Act by clause 4. The rate of levy will be 1% of the value of the leviable grain legumes, or a prescribed rate up to a maximum of 3% of the value of the leviable grain legumes.

A new section 9, that deals with exemptions from the levy, will be substituted into the Principal Act by clause 5. The levy will not apply to leviable grain legumes: * delivered to a particular person by the producer where the amount of levy payable would be less than the leviable amount; * processed by or for the producer for domestic purposes or on their farm; and * processed by or for the producer where the amount of levy payable would be less than the leviable amount.

References 1. The statistics contained in the `Background' to this Digest were extracted from the Australian Bureau of Agricultural and Resource Economics, Agriculture and Resource Economics Quarterly, Vol. 4, No. 2, June 1992.

Bills Digest Service 13 July 1992 Parliamentary Research Service

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 1992.

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Published by the Department of the Parliamentary Library, 1992.