Tomato Levy Conundrum

High on the agenda for the next Australian biennial Protected Cropping Association (PCA) conference, to be held in Melbourne in July 2013, will be further discussion on the introduction of a national tomato levy. Without a levy, they say, the industry is hamstrung on various issues such as greenhouse/minor use of new chemicals, effective treatments of specific diseases, and increasing the Australian suite of biocontrols. Those who support a levy argue it could also be an opportunity to be a signatory of the Biosecurity Act, which would mean compensation for growers affected by an overseas pest or pathogen.

Obstacles in the way of a tomato levy are reservations about the management of collected funds and how the money will be spent. However, there are other issues impeding a tomato levy, including dissent by some growers who say they will derive little or no direct benefits from a levy at a time when they are struggling to remain profitable as a result of skyrocketing input costs. This, they say, is just another impost for growers, reducing their already slim margins further.

This isn’t the first time a tomato levy has been touted. In fact, Queensland introduced a fixed tomato levy in 1937 at the rate of five shillings per ton on tomatoes delivered by rail, road or boat. On lesser quantities, growers were charged a halfpenny per case, with a minimum charge of one penny. The levy was collected by the Commissioner of Railway and processing factories. Although the levy was intended to be expended in the interest of the fruit and vegetable industry in Queensland, little benefits went to the tomato sector. In more recent times, a compulsory tomato levy was introduced in Western Australia in 2009 at the rate of four cents per 100 kilograms of tomatoes. Although growers voted for the levy, those opposed to it said it would bring no direct benefits to local producers, especially in remote regions. The conundrum for WA growers is how a national tomato levy will work alongside a state levy.

Growers are right to be concerned about a national tomato levy and how it will be managed and spent. Although the levy is intended to further R&D on behalf of hydroponic and greenhouse tomato growers, and to develop better management practices, current levies on other commodities is siphoned off for projects such as the production of a glossy quarterly publication, supported in the main by “strategic partnerships” with pesticide companies who have little interest in furthering IPM and biocontrol research. The proof of this are shrinking funds for IPM and biocontrol research, and AUSVEG conference presentations that promote a pesticide approach.

It’s no secret that those administering the levies have changed their priorities in line with government policies. AUSVEG and Horticulture Australia, who match grower levies, claim most of the nearly $13 million income for 2011-2012 was spent on R&D, yet cite ‘Consumer Alignment’ as its No. 1 objective, “to better understand and meet consumer needs both domestically and internationally to increase demand.” Other priorities include: Market and Value Chain Development; Farm Productivity, Resource Use and Management; and ‘Development Drive Train’, whatever that means. Such expressions bring new meaning to the term R&D!

Before committing to a national tomato levy, hydroponic and greenhouse tomato growers should scrutinise the outcomes of the WA levy, now in its fourth year of operation, and insist on representation on how their levy money will be spent, along with a list of ‘real’ industry R&D priorities. Otherwise, the industry has learnt nothing from history.

Steven Carruthers

PH&G April 2013 – Issue 130

Update – New Zealand Levy

There are two levies paid by producers  in New Zealand. There is the HortNZ levy at 15 c per $100, plus a product group specific levy, which depends on which group the grower is in.

The Fresh (GH) tomato levy is 25c/$100, making a total of 40c/$100 The process tomato levy is 42 c/$100 , making a total of 58c/$100.

The $100 is based on the selling price at the first point of sale.