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Grain Legumes Levy Amendment Bill 1994



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House: House of Representatives

Portfolio: Primary Industries and Energy

Commencement: Royal Assent

Purpose

To ensure that grain legumes used by a producer on- farm for commercial purposes are not exempt for the purposes of levy payment.

Background

A levy is imposed on the following grain legumes:

- Field Peas,

- Lupins,

- Faba Beans,

- Chick Peas,

- Mung Beans,

- Pigeon Peas,

- Peanuts,

- Navy Beans,

- Vetch,

- Cow Peas, and

- Lentils.

Lupin production totalled 1 047kt (valued at $184m) in 1991- 92, is estimated to total 1 145kt (valued at $218m) in 1992- 93, and forecast to total 1 384kt (valued at $255m) in 1993- 94. 1 Exports of lupins totalled 548kt (valued at $102m) in 1991- 92, are estimated to total 718kt in 1992- 93 (valued at $148m), are forecast to total 470kt in 1993- 94 (valued at $97m). 2

Field pea production totalled 473kt in 1991- 92 (valued at $113m), is estimated to total 464kt (valued at $119m) in 1992- 93, and is forecast to total 523kt (valued at $128m) in 1993- 94. 3 Exports of peas (including field peas, chick peas and cow peas) totalled 278kt (valued at $78m) in 1991- 92, are estimated to total 591kt (valued at $169m) in 1992- 93, and are forecast to total 449kt (valued at $152m) in 1993- 94. 4

The levies are imposed by the Grain Legumes Levy Act 1985. The levies are payable by the producer. The Primary Industries Levies and Charges Collection Act 1991 provides for the collection of the levies. Proceeds raised by the levies go to the Grains Research and Development Corporation, under the provisions of the Primary Industries and Energy Research and Development Act 1989. The levies on grain legumes were imposed by the Commonwealth at the request of the grain legumes industry, and funds raised are matched by the Commonwealth up to a maximum of 0.5% of the relevant industry's gross value of production. Grain legumes levy receipts are estimated to total $4.097m in 1993- 94 and $3.284m in 1994- 95. 5

The operative rates of levy, as at 1 February 1994, are:

- Field Peas 1.03% ad valorem, 6

- Lupins 1.03% ad valorem,

- Faba Beans 1.00% ad valorem,

- Chick Peas 1.00% ad valorem,

- Mung Beans 1.00% ad valorem,

- Pigeon Peas 1.00% ad valorem,

- Peanuts 1.00% ad valorem,

- Navy Beans 1.00% ad valorem,

- Vetch 1.00% ad valorem,

- Cow Peas 1.00% ad valorem, and

- Lentils 1.00% ad valorem. 7

Under section 9 of the Grain Legumes Levy Act 1985, levy is not payable in the following circumstances:

* if the weight of leviable grain legumes delivered by the producer to a particular person is less than the leviable weight [subsection 9(1)]; 8

* if leviable grain legumes are processed by or for the producer, and he/she used the grain legumes, or all of the products and by- products of the processing, for domestic purposes on his/her farm [ subsection 9(2)]; and

* if leviable grain legumes are processed by the producer for commercial purposes on his/her farm and the leviable weight of those grain legumes is less than the leviable weight [subsection 9(3)].

The purpose given in the Explanatory Memorandum for the amendments proposed by this Bill is to ensure that grain legumes used by a producer on- farm for commercial purposes are not exempt for the purposes of levy payment. The reason for the proposed amendments is that subsection 9(2) of the Grain Legumes Levy Act 1985 exempts from levy, for example, a peanut producer who establishes a peanut- butter processing facility on- farm and sources his/her raw material requirements internally. It can be inferred from the Explanatory Memorandum that the Grains Council of Australia, which is the industry representative organisation under the legislation, considers this exemption to be inappropriate.

Main Provisions

Under the amendment proposed by clause 3 to subsection 9(2), levy will not be payable if leviable grain legumes are processed by or for the producer, and he/she

uses the grain legumes, or all of the products and by- products of the processing, for domestic purposes but not for commercial purposes on his/her farm.

Endnotes

1. Australian Bureau of Agricultural and Resource Economics, Australian Commodities, Vol. 1, No. 1, March 1994, pp. 134 and 137.

2. ibid., pp. 141 and 144.

3. ibid., pp. 134 and 137.

4. ibid., pp. 141 and 144.

5. The Commonwealth Public Account 1994- 95, Budget Paper No. 2, p. 39.

6. The term "ad valorem" means a surcharge based on a percentage of the value of the product.

7. The rates of levy specified in this Digest have been obtained from the Levies Management Unit of the Department of Primary Industries and Energy and relevant principal legislation and regulations.

8. The term "leviable weight" is defined by section 4 of the Grain Legumes Levy Act 1985 as 15 tonnes or a prescribed weight.

Ian Ireland (Ph. 06 2772438)

Bills Digest Service 24 June 1994

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 1994.

Except to the extent of the uses permitted under the Copyright Act 1968, no part of this publication may be reproduced or transmitted in any form or by any means, including information storage and retrieval systems, without the prior written consent of the Parliamentary Library, other than by Members of the Australian Parliament in the course of their official duties.

Published by the Department of the Parliamentary Library, 1994.