Protect, grow and create value for New Zealand’s ...€¦ · $0.10 per kg on all harvested honey * - including honey comb honey • There is no levy payable by any producer with

BRIEFING TO INCOMING MINISTER’S | APICULTURE NEW ZEALAND

Protect, grow and create value for New Zealand’s apiculture industryApiculture New Zealand’s Amended 2018 Commodity Levy Proposal

2018 COMMODITY LEVY PROPOSAL | APICULTURE NEW ZEALAND1

Vision

The New Zealand honey and beekeeping industry is a vibrant and growing contributor to New Zealand’s economy, nationally respected, internationally recognised.

Mission

A trusted and united body creating value and opportunity for our members.

Goals

• To secure and strengthen Apiculture New Zealand as the peak body for the apiculture industry

• To strengthen the trust and confi dence of markets in the industry’s product and practices: Universal standards and agreed defi nitions – international reputation

• To protect the intrinsic value of industry assets: health of our bees/strong biosecurity & good industry practice

The need for change

Our industry is growing. We need to manage and leverage this growth, and importantly, ensure we sustain a healthy bee population. To do this we know that we need to invest more in:

• research relating to bee health

• biosecurity

• education and best-practice beekeeping

• sustainable beekeeping, including stocking levels

• supporting industry generally, including on market access issues

Apiculture New Zealand is doing what it can, but realistically we are a voluntary organisation with limited funds. This means national work programmes and multi-season projects are beyond our fi nancial capability.

Our aim is to implement a commodity levy that is fair, equitable, and aimed at supporting the long-term success of the entire industry.

What is a commodity levy?

Parliament has provided a mechanism for primary sector industry bodies to fund their work in a way that those who benefi t from this work contribute towards its funding. It is called the Commodity Levies Act and is established only with the consent of potential levy payers.

This means Apiculture New Zealand must undertake consultation, to consider feedback and fi nally, to demonstrate an industry mandate among those who are potential levy payers through a vote.

2018 COMMODITY LEVY PROPOSAL | APICULTURE NEW ZEALAND 2

The Minister of Agriculture must be satisfi ed that the application has met the requirements of the Act.

The levy order is then valid for six years, renewed through further consultation and a referendum. Most primary sector groups have a commodity levy.

The commodity levy needs to be run by an industry association that has the credentials and infrastructure in place to support the work that needs to be done. ApiNZ already has good infrastructure and a strong management team in place.

Consultation Process

ApiNZ launched its fi rst commodity levy proposal for industry consultation at its national conference in July 2018.

The proposed design for consultation was:

• A flat $0.10 per kg levy on all honey

• Applied to honey extracted for commercial purposes

• Collected at the point of extraction (by extractors) and passed on quarterly to ApiNZ

• A maximum levy rate of $0.15c/kg of honey during the levy period (6 years) only to be increased with the consent of levy payers

• A minimum levy collection of $86

ApiNZ proposed that voting on this design would take place throughout October 2018.

ApiNZ undertook nine consultation meetings across New Zealand during August and September as well as a workshop at the ApiNZ Conference in Blenheim. These meetings were also supported by a dedicated website for all levy information. www.apinz.org.nz/levy.

Consultation Feedback The consultation meetings were well attended by a good cross section of industry participants.

Key feedback themes included:

• Some support for a tiered levy system, with manuka honey paying a higher levy than non-manuka

• The levy being applied to as broad a base as possible. For example, including comb honey

• Levy funds ought to be collected by ApiNZ, not by extractors (with extractors passing on extraction information to ApiNZ)

• A minimum volume being applied for levy collection, in place of a minimum levy collection

• Moving the levy payment further from the extraction date to allow more time for honey to be sold ahead of levy payments being due

• Seeking additional levy-payer representation on ApiNZ’s Board to ensure that levy payers are well represented

• The ability to track and to audit honey volumes at the time of voting

• Requests for additional time to consider this proposal and vote

ApiNZ’s Board met following these consultation meetings and is now seeking feedback on the following amended levy design.

APICULTURE NEW ZEALAND2018 COMMODITY LEVY PROPOSAL APICULTURE NEW ZEALAND


ApiNZ’s Amended Commodity Levy Design

ApiNZ has developed an amended design to reflect consultation feedback and ensure that the commodity levy best reflects industry feedback.

Key proposed design parameters:

• $0.10 per kg on all harvested honey* - including honey comb honey

• There is no levy payable by any producer with an annual production of less than 750 kg per annum.

• For producers of 750 kg or more per annum the levy is payable on the annual full production

• The vote on the levy will open 1 February 2019 and close 1 March 2019 – we anticipate that the result will be published around 11 March 2019

• The first levy won’t be payable until early 2020

This model captures those producers who hold over 95% of all hives in New Zealand, based on actual numbers of commercial beekeepers who easily produce the majority of honey in New Zealand.

Non commercial members represent just over 3% of all hives while packers and marketers don’t produce the commodity that is honey – Only the commodity can be levied.

How will the proposed levy work?

• All producers of honey in New Zealand with an annual production of 750 kg or more will be levied $0.10 per kilogram of harvested honey

• The levy order will require extraction plants to submit annual returns to ApiNZ each year so that ApiNZ can invoice beekeepers. The levy will be paid directly by beekeepers

• The levy will only be payable by honey producers that have a total annual production of 750 kg or more per annum

• For example, a producer that has an annual production of 749 kg of any honey in any year will not have a levy payable to ApiNZ

• A producer that produces 750 kg in any year will have a levy of $75 payable to ApiNZ

• The levy order will allow for the levy rates to increase to a maximum of $0.15c over the levy period of 6 years. The rate of levy cannot be increased without the majority vote of levy payers

• Levy payment will be compulsory by law

* During the consultation meetings ApiNZ had feedback that the levy would be fairer if applied at a higher rate for manuka honey.

We looked closely at this option and considered introducing a tiered levy system where all non monofloral manuka is levied at $0.10 per kg, while monofloral manuka would be levied at a higher rate (eg $0.20 per kg).

MPI has asked us to consider the practicalities of implementing the two-tiered levy. The proposal is to impose levy on honey at the point of extraction, but testing for manuka usually occurs after extraction, and so there may not be reliable information available to base the two-tiered levy on. This will be particularly difficult for honey sold in the domestic market where currently no testing for manuka is a legal requirement.

For that reason we are, for now, proposing a single rate at $0.10c per kg for all honey. We would be open to looking at the tiered option again once there is more clarity around this. We are interested in hearing from you on this point and urge you to send us your feedback at: [email protected].


Invoice payable to ApiNZ by 31 October

Honey not captured by the extraction system must be self declared by this date

Honey produced

Honey extracted

Extractors send ApiNZ extraction information by 30 June

ApiNZ generates invoices to be sent to beekeepers (based on extraction information) by 31 July

31OCT

How much will the levy raise?

The levy collection remains directly linked to honey volume produced.

31OCT

We anticipate that this levy will raise (on average)

around $2 million per annum

$2M


Who is eligible to vote for the levy?

• You are eligible to vote if you have 26 hives or more (estimated to produce 750 kgs)

• Those with 25 hives or less will not be eligible to vote.

How will the vote work?

Under the Commodity Levies Act, Apiculture New Zealand must demonstrate over 50% industry support for the introduction of a commodity levy. A result in favour of the commodity levy will occur if:

• The ‘YES’ votes equal more than half of all the votes cast, AND

• The 'YES' votes represent more than half of the total registered beehives of those who voted.

• This approach, on a hive basis, ensures voting for a commodity levy is legitimate and can be easily audited using the AFB database, based on the 2018 Annual Disease Return Individual Beekeeper Declaration (ADR).

This approach also captures those producers who hold over 95% of all hives in New Zealand.

Voting can be done online or by post – all beekeepers will receive a ballot paper and voting form before the beginning of February, along with instructions for electronic voting.

Science & research: 40%

Biosecurity: 20%

Advocacy: 10%

Leveraging 3rd party funding: 5%

Education & skills: 3%

Identifying NZ bee product benefits: 3%

Market access: 3%

Reserves: 6%

Administration: 10%

Commodity levy investment approximate spend by area

How much money will be spent?

Science & research: 40%

Biosecurity: 20%

Advocacy: 10%

Leveraging 3rd party funding: 5%

Education & skills: 3%

Identifying NZ bee product benefits: 3%

Market access: 3%

Reserves: 6%

Administration: 10%

Key focus areas

The following areas will be used as a basis for consulting future levy payers on how Apiculture New Zealand might invest commodity levy funds. Levy payers have their say on the investment programme annually through the AGM.

| APICULTURE NEW ZEALAND2018 COMMODITY LEVY PROPOSAL


Science & research

• Bee health: for example, new treatment methods for Varroa, such as research into oxalic acid and glycerine towards an approved treatment method; research into treatment resistance, investigation into bio-control.

• Ongoing Colony Loss surveys: to benchmark bee health domestically and internationally (shared Government and Industry funding).

• Pesticides: research into the impact of toxins on bee health; identifying the levels of toxins in our soils & water; how we can mitigate the impact of pesticides.

• Sustainability: for example, research into a bio-control for passion vine hopper to mitigate the risk of Tutin in honey.

• Science extension: a technology transfer programme between scientists and beekeepers, facilitating discussion around completed, current and potential research.

Biosecurity

• Control and management of incursions and/or eradication programmes for new pests and diseases, identifying new bee diseases at point of entry, introducing sentinel hives and programmes of work in consultation with industry.

• Management programmes for Varroa, Giant Willow Aphid, Wasps, Myrtle Rust and others.

• Readiness funding. Including the ongoing involvement in Government Industry Agreement (GIA) mechanism – so any GIA levy introduced can be established at zero unless a specifi c incursion warrants a targeted response.

Industry Advocacy

• Representing industry needs and concerns to decision makers through regular advocacy to Government Ministers and agencies, including submissions and policy support.

• Supported by industry-based Focus Groups to ensure policy represents levy payers.

• Leveraging 3rd party funding: quantifying the real value of a thriving bee population to New Zealand biodiversity, pastoral, forest, and horticultural industries. Funding opportunities include:

• Sustainable Farming Fund

• MBIE funding, including:

- Partnerships Scheme

- Endeavour Fund

Education and Skills

• Identifying industry needs and developing supporting programmes in response, for example, running specifi c training to support beekeepers in disease detection.

• Ongoing development of the NZ Apprenticeship in Apiculture.

Market Access

• Working with industry and regulators to ensure that New Zealand honey and bee products meet overseas market access requirements, including addressing regulatory requirements such as C4 sugars, Tutin, residues etc.

Identifying unique attributes and benefi ts of New Zealand honey and bee products

• Grow the value of all our New Zealand native mono floral honeys and bee products, positioning these as part of our New Zealand honey story.

Reserves to cover:

• multi-year projects

• unbudgeted expenditure, in the event of unforeseen events or opportunities requiring early action

• years of low yield

Administration

• Ensuring that the key activities are managed effi ciently and effectively, including levy collection, administation of funds and reporting to levy payers


If the levy is successful what will governance look like?

The Apiculture New Zealand Board will need a restructure in the case of a ‘yes’ vote to ensure that levy payers have majority representation on the Board.

Levy payers will be represented by Commercial members, who will direct the investment of levy funds. Associate members will vote for remaining Board members on levy payer feedback and the sector that represents them.

ApiNZ proposes to reduce the number of Market Board members by two in response to consultation feedback that requested greater representation from levy paying members.

Voting on the investment of levy funds will be weighted based on declared honey volumes by levy payers.

Proposed Structure

Current Structure

How does the investment process work?

Once a levy is in place there is a clear process to ensure levy payer input into spending is considered:

The Commodity Levies Act is very clear on the need to report and track projects regularly. ApiNZ will do this through regular updates including at its annual conference. In addition, an independent auditor will be appointed to review our progress annually.

Independent Chair

Commercial Members

(5)

Market Members

(2)

Non Commercial Member

(1)

• Go out to all levy payers to seek feedback on investment priorities.

• Industry Focus Groups, for example, Science and Research, Education and Skills and Biosecurity develop projects and work programmes based on levy payer feedback .

• Considers proposals from Focus Groups. Prioritises projects based on levy payer feedback, overall strategy and levy budget.

• Consists of levy-paying Board members only.

• Full ApiNZ Board considers levy payers proposals and recommendations from Board Levy Subcommittee.

• Sign-off on overall investment and strategy.

• Vote on proposals each year at AGM (and by post for those who cannot attend the AGM)

• Independent auditors review investment programme annually.

• Once investment programme in place, ApiNZ provides regular updates on progress via the NZ Beekeeper Journal and online channels.

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Independent Chair

Commercial Members

(4)

Market Members

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Non Commercial Member

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Case Studies under a levy

• All beekeepers with 25 hives and under are classified as Non Commercial

• Are not eligible to vote on the levy proposal

• Do not pay a levy

• Can join ApiNZ under current membership rate of $86 (online Journal or $115 hard copy)

• Represented by 1 Board memberNon Commercial

• Any beekeeper with more than 25 hives is classified as Commercial

• Is eligible to vote on the levy proposal

• Pay $0.10 per kg on all harvested honey

• Become fully paid members of ApiNZ (unless you opt out) with full voting rights

• Represented by 5 Board membersCommercial Beekeeper

• Required to pass on commercial extraction information to ApiNZ

• If extractors also have more than 25 hives they are eligible to vote on the levy proposal and pay a levy

• If not, they can join ApiNZ as an Associate member

Extractor

Packer & Exporter

• Do not produce a commodity and under the Commodities Levies Act therefore do not pay a levy

• Are not eligible to vote on the levy proposal

• Can join ApiNZ as an Associate member

• Represented by 2 Market Board members


You will be able to provide input into the amended commodity levy proposal from October to the end of December. You can email your views to: [email protected]. We also encourage you to look at our website, including the updated questions and answers

Your feedback

Commodity levy consultation timeline

2018 COMMODITY LEVY PROPOSAL9 2018 COMMODITY LEVY PROPOSAL | APICULTURE NEW ZEALAND

2018 2019

Ongoing opportunities to provide feedback to ApiNZ

Ballot papers received no later than

The Minister of Agriculture considers levy order

October – December 28 January

In case of a YES vote. No later than 1 April

Levy order recommended to MPI

1 February 1 March

Voting opens

Voting closes.

12 MarchResults announced

Levy order expected to be in place by 1 October 2019

Levy payable on any honey harvested from 1 October onwards – subject to the minimum volume of 750 kg produced.


1 March

You can also discuss any aspects of the levy or the work of Apiculture New Zealand by contacting:

Karin Kos, Chief Executive P: 027 4379 307 E: [email protected]

Or any member of the Apiculture New Zealand Board

Bruce Wills (Independent Chair)P: 0272 341 516E: [email protected]

Dennis CrowleyP: 07 579 2554E: [email protected]

Kate KemberP: 021 878 002E: [email protected]

Ricki LeahyP: 021 523 930E: [email protected]

Russell MarshP: 021 730 004E: [email protected]

Tony WrightP: 021 386 710E: [email protected]

Sean GoodwinP: 021 872 583E: [email protected]

John Hartnell P: 021 578 754 E: [email protected]

For more information, visit: www.apinz.org.nz/levy

Peter Luxton P: 021 447 944 E: [email protected]

Paul Martin P: 027 262 9566 E: [email protected]

Documents

Protect, grow and create value for New Zealand’s ...€¦ · $0.10 per kg on all harvested honey * - including honey comb honey • There is no levy payable by any producer with