The Productivity Commission draft Report into the regulatory burden imposed on Australian agriculture supports what farmers have been saying for some time - that farm businesses are straining under a heavy and at times unnecessary regulatory burden right across the supply chain.
Most Australian farms are small businesses, and regulatory burdens have a significant and disproportionate impact on small businesses, meaning that there is real opportunity to remove some of the red and green tape that is holding the industry back from further productivity and growth. There continues to be consistent calls from business including farmers to remove regulation but what is it we are talking about when we say removing regulation in the ag sector?
The Government defines regulation as “Any rule endorsed by government where there is an expectation of compliance”. For farmers and people that work across the agri supply chain it means practical things like getting a permit to simply move a header from one paddock to the next that actually requires two transport permits from the state transport department — one for the machine, and one for the route taken.
In the environment space it can mean submitting 60 pages of documents and 18 maps to the Australian Government Department of the Environment to be able to clear a paddock which would only be the equivalent of a few inner city residential blocks only to find the approval then wasn’t required.
In the employment space it means after finally finding the right candidate to employ, a farmer having to ring the Departmental helpline because the right forms couldn’t be accessed on the website only to sit on the phone for hours to then be told they were put through to the wrong area. After being redirected to another area having to go through the same rigmarole to find the right form to fill out and then be asked to fill out other different forms.
...regulation should not be the default option for policy makers...Tony Mahar, National Farmers' Federation
All this takes time and money away from running the business and this is where real change can be made. The calls from industry to remove “red tape” have been long and loud for some time. Likewise the industry often seeks to improve “competitiveness”. The two phrases can be seen as “jargon” or buzz words but these and a myriad of other real and everyday examples are what farmers mean when they say removing red tape and improving competitiveness. The less time filling out forms, reporting and complying with what can be nothing more than administrative requirements, the more time that can be spent on farm seeking improve crops or animal husbandry.
We should recognise that farmers and the broader food and fibre supply chain have benefitted significantly from regulation. The industry is very well positioned globally in terms of our reputation for reduced disease and pest risks thanks to strong a strong and science based biosecurity regime. Similarly our ridged and consistent food safety regulations have resulted in food safety scares being at an absolute minimum.
Not all regulation is bad regulation. However, we must agree that regulation should not be the default option for policy makers: the option offering the greatest net benefit should always be the recommended approach. The challenge for legislators is to be clear about the problem they are trying to address and ensure the mechanism is specific and targeted to minimise the unintended consequences.
The Coalition Government has rightly identified the agricultural industry as one of the five growth pillars of the economy and the opportunity for better returns for the agriculture sector by removing regulation across all levels of government should not be ignored. There is no doubt that inconsistent regulatory requirements make it difficult for farmers to understand their obligations and add to the cost of doing business. Duplicative and overlapping regulation and reporting between the three tiers of government is a major area of concern.
What farmers want is a clear process and evidence base for determining the need and application for regulation including a review through the economic, social and environmental lens.
Ineffective regulatory outcomes can be linked to poor regulation making practices. The suggestion the Draft Report makes that the Regulation impact assessment (RIA) processes are not living up to their potential for supporting good regulation making appears to have a lot of merit.
So what now? Well the government, hopefully with the help of industry, must come up with strategies and arrangements to improve the motivations for policy makers to use the relevant internal processes as real analytical tools to assess and determine if regulation is the best approach and will actually address the problem (real or perceived), rather than ticking boxes or undergoing a simple compliance exercise.
In addition to that government must commit to removing some of these regulatory barriers to business and let farmers get on with what they do best, grow food and fibre.
Tony Mahar is the Chief Executive Office of the National Farmers' Federation.