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The cost of compliance: Australian farmers tied up in red tape

12 September 2013

Australian farm businesses are struggling under the growing weight of unnecessary regulatory burden, a new paper released by the National Farmers’ Federation (NFF) today shows.

The paper, Red Tape in Australian Agriculture, outlines the impact of excessive, overlapping and inconsistent regulation, unwieldy approval, licensing and reporting requirements and heavy handed regulators on the Australian farm sector.

The paper comes as the World Economic Forum releases its global competitiveness report for 2013-14, which shows Australia has slumped to 128th position, out of 148 countries, for the burden of government regulation – down from 96th last year, and 68th the year before.

“Every day, farm businesses battle through a myriad of hard to understand, complex or duplicative regulations, making it difficult for farmers to get on with the job of producing food and fibre while also remaining profitable and competitive,” NFF President Duncan Fraser said.

“The World Economic Forum figures are alarming – in just two years, Australia has slipped 60 places and is now ranked in the bottom 20 countries, drowning under ever increasing red tape.

“Of course, red and green tape are not new issues. As our paper shows, unnecessary regulation is a huge cost burden for farmers. In 2007, it was over $22,500, or 14 percent of average net farm profit. We can only assume, given the extraordinary rise in the amount of regulation passed by the former Government, particularly in their last term, that this figure has increased significantly.

“One of the most concerning examples of onerous regulation is environmental law – particularly around seeking approval to change land use and farming practices.

“Farmers have to navigate through a minefield of Local, State and Federal Government environmental regulations,” Mr Fraser said.

“Farmers may be required to go through both State and Federal accreditation processes – with different guidelines, rules and requirements – for the same on-farm activity. A key challenge is that while both the State and Federal Governments have responsibility for the environment, they often have different criteria on which applications are assessed: different geographical coverage, different scientific descriptions, and different impact and threshold tests.

“This, like many other areas of regulation, is a complex, onerous and costly process for farmers – which is why we have strongly welcomed the Coalition’s commitment to cut $1 billion in red and green tape from Australian businesses – a promise we will certainly be holding them to for the agricultural sector as they progress into Government.

“We ultimately want to see a reduction in the amount of unnecessary or duplicative red tape, and are calling on the Government to deliver this and to ensure they better understand the cost impact of any future regulation on Australian farm businesses, before it is implemented,” Mr Fraser said.

Red Tape in Australian Agriculture is available to download here.

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