The APVMA charging framework
3.1
The APVMA is funded largely through fees, levies and charges imposed on
registrants on a cost recovery basis. However, the sustainability of the
current model in providing sufficient resources for the authority was
questioned during the inquiry.
3.2
Although this type of funding model is used by other regulatory agencies
in Australia and around the world, there were differing opinions as to whether
a cost recovery model could lead to actual, or perceived, undue influence on
the decisions of the regulator.
3.3
While many stakeholders recognised the cost recovery model as
appropriate, some expressed concern that certain fees could act as an
impediment to registering certain chemicals, particularly those for minor uses.
This situation was made more complex to resolve by the small size of the
Australian market.
3.4
This chapter considers the APVMA's charging framework and explores the
views of submitters in relation to it.
History of the government charging framework
3.5
A 2001 Productivity Commission review of Commonwealth cost recovery arrangements
found almost all Australian government agencies recovered some of their costs, and
that the proportion was increasing. At that time, more than $3 billion was
raised annually by agencies through cost recovery. The review recommended that the
Government adopt a formal cost recovery policy for agencies undertaking
regulatory and information activities.[1]
3.6
In December 2005, the Australian Government established a formal cost
recovery policy, administered by the Department of Finance and Deregulation.
The central principal of the policy was that:
Agencies should set charges to recover all the costs of
products or services where it is efficient and effective to do so, where the
beneficiaries are a narrow and identifiable group, and where charging is
consistent with Australian Government policy objectives.[2]
3.7
In April 2015, the Australian Government agreed to implement a whole‑of‑government
charging framework to apply across the general government sector. The framework
consists of:
-
a charging policy statement, providing the rationale for charging
activities;
-
charging considerations to guide decision‑making on
appropriate charging; and
-
charging principles to guide design, implementation and review of
charging activities.[3]
3.8
The Australian Government charging policy states:
Where specific demand for a government activity is created by
identifiable individuals or groups, they should be charged for it unless the Government
has decided to fund that activity. Where appropriate for the Australian
Government to participate in an activity, it should fully utilise and maintain
public resources, through appropriate charging. The application of charging
should not, however, adversely impact disadvantaged Australians.[4]
Charging by other agencies
3.9
In addition to the APVMA, other regulatory agencies, including the TGA,
the National Industrial Chemicals Notification and Assessment Scheme (NICNAS)
and FSANZ, charge registrants for the cost of evaluation and other regulatory
services.[5]
3.10
The Committee received evidence that all comparable international
regulators charge 'the regulated entity for access to [the] chemicals market in
that country', though the exact charging mechanism varies. For instance, the
Committee heard that in the United States the entire evaluation fee is charged
up‑front rather than being partly recovered through levies on sales.[6]
3.11
The New Zealand Government expects its Environmental Protection
Authority to 'set fees that recover a fair and reasonable proportion of the
costs' of providing its services. It is funded through a combination of fees
and charges, and crown funding.[7]
The New Zealand Ministry for Primary Industries similarly receives crown
funding and revenue from levies and application fees.[8]
3.12
The Canadian PMRA charges fees for the review of applications to
register pesticides, and an annual charge for every registered pesticide. It
also receives government funding.[9]
The Canadian Veterinary Drug Directorate, part of Health Canada's Health
Products and Food Branch, similarly charges a number of fees including for
evaluation, licencing and authority to sell.[10]
3.13
Before an active substance can be used in a plant protection product
within the European Union, it must be approved by the European Commission
following scientific and technical evaluation by a rapporteur member state.
Most rapporteur member states charge a fee for the evaluation of a new active
substance.[11]
Countries within the European Union authorise plant protection products within
their borders and ensure compliance with EU rules. Member states are permitted
to cost recover through fees and charges. These vary between countries.[12]
APVMA funding
3.14
The APVMA is funded through fees, levies and other charges imposed under
legislation, with the exception of specific government‑funded projects to
improve or enhance the authority's ability to perform its legislated functions.
The relocation to Armidale and reforms stemming from the 2015 white paper were
funded by government.[13]
3.15
DAWR told the Committee that APVMA funding arrangements complied with
the charging framework. The department also confirmed that the authority's
regulatory activities were subject to the Australian Government Cost Recovery
Guidelines, which establish the overarching framework for the design,
implementation and review of regulatory charging activities.[14]
3.16
The APVMA's current cost recovery arrangements were implemented on 1 July
2013 for a period to 30 June 2015, during which time a first‑principles
review of the APVMA's cost recovery arrangements was to have been completed.[15]
The 2013 cost changes were intended to address identified shortfalls in the
authority's funding in preparation for a subsequent 2015 cost recovery impact
statement. However, neither the first‑principles review nor the 2015 cost
recovery statement were completed within the established timeframe. The cost
recovery statement is now scheduled for 2019–20 and the authority continues to
operate on the cost recovery arrangements introduced in 2013.[16]
3.17
The authority incurs costs through registration assessments, renewals of
existing product registrations, and by undertaking a variety of post‑market
compliance, monitoring and enforcement activities.[17]
3.18
The APVMA recovers the costs of registrations and approvals through
application fees and levies. The costs of assessing an application are
collected in two parts: 40 per cent of the assessment charge is recovered
upfront through an application fee; the balance is recovered through a levy on
the annual value of sales.[18]
3.19
The cost to assess an application for registration is split to ensure
application fees are not a disincentive to bring new and innovative products to
market. This is particularly the case for small businesses, niche products, and
chemical products with low value of sales. It also aims to encourage
competition and ensure equitable access to the chemicals market for the
producers of generic variants.[19]
3.20
Post‑market compliance activities conducted by the APVMA, including
good manufacturing practice assessments, licencing, export certificates and
other investigation and enforcement activities are subject to fees.[20]
3.21
The APVMA's fees, levies and charges are credited to a special
appropriation, created under s. 58(6) of the Agricultural and Veterinary
Chemicals (Administration) Act 1992, held and managed by DAWR, for and on
behalf of, the APVMA.[21]
3.22
The following table (Table 3.1) details the APVMA's income sources during
2017–2018, showing the breakdown and proportion of fees and levies.
Table 3.1—APVMA income sources 2017–18
| Income source |
Income ($'000) |
% |
| Receipts from industry |
|
|
| Levies |
18,802 |
47.97 |
| Application fees |
6,246 |
15.94 |
| Annual fees (renewal fees) |
5,604 |
14.30 |
| Other receipts from industry |
2, 272 |
5.80 |
| Parliamentary appropriation |
6,056 |
15.45 |
| Other revenue |
215 |
0.54 |
| Total Income |
39,195 |
100.00 |
APVMA Annual Report – total
income 2017–18[22]
3.23
DAWR explained to the Committee the benefits of a cost recovery
arrangement, stating:
Cost recovery measures improve the transparency of the costs
of sound management of chemicals and preserve the integrity of those management
systems thereby ensuring they maintain adequate resourcing to protect human,
animal and environmental health and Australia's interests as an agricultural
exporter.[23]
3.24
An independent review of the APVMA's cost recovery arrangements in 2017
conducted by PWC did, however, raise some concerns about the sustainability of
the authority's funding. PWC found that:
-
the fees charged by the APVMA were not based on the workload of
individual applications;
-
there was no annual indexation of charges;
-
the prices set were not consistent or reflective of the true
costs of undertaking activities;
-
revenue forecasts were optimistic and not representative of
actual results; and
-
budget allocations for the authority are aligned to a forecast
activity level that may not have been achievable due to reduced volumes and
decreased revenue. In particular, the price structure for applications did not
result in a sustained 40 per cent cost recovery.[24]
3.25
In terms of its financial position, the APVMA recorded a deficit for
2017–18 of $880,000; and has run an operating loss since 2014–15. The authority's
equity balance of $6.418 million was more than $500,000 below the targeted
equity position of $7 million, and lower than the 2016–17 total equity balance
of $6.798 million. The APVMA's target equity balance of $7 million is
equivalent to three months operating expenses, regarded as sufficient to cover
periods of variations between revenue and expenses as a consequence of movement
in activity volume. PWC noted a downward trend in the level of equity reserves
at the end of reporting years once normalised for equity injections.[25]
3.26
The APVMA observed that the structure of payments affected the cash flow
of the authority. The authority's primary income was derived from levy payments
which come due in December and June; it also received registration payments in
May and June—meaning the majority of revenue was paid at three points during
the year. Although cash holdings could exceed $7 million at points during the
year, the authority had to operate to keep cash levels above $2 million as an
operating reserve to ensure sufficient cash was available to pay creditor
expenses.[26]
3.27
DAWR acknowledged the APVMA's financial position was deteriorating and could
not be sustained if expenditure and cost recovery pressures remained unaddressed.[27]
However, the APVMA's Annual Report 2017–18 indicated the planned 2019–20
cost recovery impact statement was expected to address some of these issues in
the context of a new business operating model.[28]
3.28
DAWR informed the Committee that the APVMA was currently reassessing the
entirety of its regulatory activities to ensure the fees and charges
appropriately reflected the costs of the activities and the administrative
infrastructure supporting them. The APVMA announced it would implement a renewed
cost recovery implementation statement in 2019–20; with interim measures to
retain positive cash flows.[29]
Views regarding the impact of the APVMA funding model
Evidence regarding APVMA's
independence
3.29
The Committee received considerable evidence that supported the view
that the authority is independent. Many witnesses acknowledged that whilst the
APVMA was largely funded through fees and levies, this type of system reflected
global best practice, was not an unusual arrangement, and did not allow for
undue influence in practice.
3.30
Further, evidence suggested the alternative to cost recovery—full public
funding—could make the authority subject to the general budgetary decisions of
the government of the day and could result in insufficient funding for its
regulatory functions.[30]
It was also suggested that if there was no financial risk to registrants, 'there
is a high probability of poorly conceived registration proposals being
submitted. The large number of registrants of generic products in Australia
make this a particular concern'.[31]
3.31
The National Farmers' Federation suggested it was a misunderstanding of
cost recovery principles to suggest the APVMA could be unduly influenced.[32]
Rather, as suggested by a number of submitters, decisions by the APVMA were
made within a robust regulatory and science‑based framework governed by legislated
processes and procedures.[33]
3.32
The Australian Academy of Science explained that the regulator's
activities were 'based on formal legislated requirements that provide for
decisions informed by expert scientific review. The legislation and supporting
administrative arrangements ensure that decisions are based on the best
available information'.[34]
Further, the Academy:
...considers the APVMA's analyses to be generally open and
transparent, well informed and appropriate. Its regulatory decisions with
respect to agricultural chemicals are published on its website and are subject
to public scrutiny. Such scrutiny is important for public trust in the agency.[35]
3.33
Similar sentiments with regard to the independence of the regulator's processes
were expressed by Bayer Crop Science:
I understand that people feel that, because we are funding
the organisation, there might be some conflict there. I don't believe that to
be the case whatsoever. There's a very straightforward process by which we deal
with our applications and the APVMA deals with our applications.[36]
3.34
Animal Medicines Australia's evidence reflected general industry
agreement as to the strength and quality of the authority's work, stating:
We have no concern with the independence of the APVMA. We
have concerns with respect to their efficiency and predictability from time to
time, but the regulator on the whole is very scientifically based and makes
rigorous decisions which are respected around the world.[37]
3.35
Support for the APVMA's science was also expressed by AgForce Queensland
who told the Committee:
We believe they are very good with their science. They have
very rigorous methods. It is all above board...It is an independent regulator. Like
a lot of services offered by regulators, by government, they've got to look at
cost recovery.[38]
3.36
The NSW Farmers' Association also voiced its support for the cost
recovery model and argued that it ensured an appropriate distribution of the
financial burden. It offered the following observations:
NSW Farmers has not seen any evidence to suggest that there
is undue influence from chemical manufacturers on the decisions made by the
APVMA. The cost‑recovery model currently employed by the APVMA is appropriate
for an agency undertaking work that is often for private benefit,
notwithstanding the broader public benefit attached to agriculture,
environmental stewardship, biosecurity and the prevention of disease. We also
recognise the need for investment certainty in the agricultural sector to
ensure that farmers have access to safe and reliable chemicals...
The current cost‑recovery model used by the APVMA
essentially ensures that the financial burden of chemical registration is not
directly linked to the agricultural industry or taxpayers. Registration of
chemicals by a private company represents a private good, and this cost should
not be fully passed on to government.[39]
3.37
Chemistry Australia acknowledged that whilst suggestions of undue
influence were sometimes made, it was of the view:
There isn't corporate influence over the regulatory system...the
facts are that we have full confidence that it's independent. Just because our
members pay and participate in the scheme doesn't mean every regulatory
decision that's made is one that's made in their favour... They're [regulatory
scientists at the APVMA] professionals. They have training and education, and
they have roles and responsibilities which are legal ones.[40]
3.38
GrainGrowers pointed to the international reputation of the APVMA as
evidence of its independence and scientific authority, and indicated:
The strength of the regulatory and compliance measures
imposed by the APVMA are recognised internationally through the memorandum of
understanding held with New Zealand, and the mutual recognition agreement for
good manufacturing practice with nations such as Europe, the US and Canada.
Furthermore, the practice of international collaboration to assess specific
applications, and use of international assessments reports in work‑sharing
arrangements, supports independent national risk assessment.[41]
3.39
Submitters identified a number of decisions taken by the regulator—including
suspensions of product registrations or changes to label use—which were
strongly opposed by some parts of the industry. These included the recent
review of 2,4‑D label instructions; the 2011 suspension of insecticide
products containing dimethoate and the issue of new label instructions that no
longer allowed its use on specified food crops; the 2014 cancellation or
variation to all registered uses of products containing fenthion, on the
grounds the chemical posed unacceptable risks to human and environmental health;
and regulatory measures in 2000 including label amendments with updated
directions for use, first‑aid and safety directions, and environmental
warning statements for products containing chlorpyrifos.[42]
3.40
With regard to these decisions, CropLife Australia stated:
While in some cases these decisions may have significant
negative consequences for CropLife members or grower industries and attract
considerable political and community opposition and media attention, the APVMA
consistently acts in the best interest of the Australian public by committing
to science and evidence‑based regulatory decisions.[43]
3.41
The Pastoralists & Graziers Association of Western Australia
summarised its members' perspectives with regard to the regulator's decisions,
arguing:
Despite the not unexpected disagreements between industry and
regulator over costs, timeliness, efficiency and access to agricultural chemicals,
there is industry support of both the APVMA's independence and its primary role
as a regulator.[44]
3.42
There was also support for the impartiality of the funding model, which
the Western Australian Farmers Federation argued did not create any incentive
to favour the registration of certain chemicals.[45]
The NSW Farmers' Association agreed, stating:
NSW Farmers does not consider that the funding model provides
incentive for the APVMA to favour registration of certain chemicals;
particularly in the case of glyphosate, were it to be removed from the market,
the APVMA would receive income from other companies seeking to register
chemicals to fill the gap in available herbicides.[46]
3.43
Evidence provided by industry groups suggested there was little
opposition from them to the fees and levies charged by the APVMA. Subject to
some reservations about the impact of cost recovery on investment in innovation
and minor use chemicals (discussed below), there was in fact general support
for cost recovery from these industry stakeholders.
3.44
However, some stakeholders stressed the importance of industry being
able to engage with the regulator and for timely service in response.[47]
The Veterinary Manufacturers and Distributors Association stated:
We accept that, as with other government regulatory entities,
the APVMA is virtually a fully cost recovered agency and, while we would be
happy to not pay for it, the reality is that we do as required by the legislation.
We do, however, wish that the APVMA's performance was more predictable and
timely, and to that end we also engage with the regulator to help streamline
procedures while accepting the robust assessment and review processes that
protect not only the animal population of Australia but also the integrity of
our industry...
While we'd like to be able to say that we control the
regulator, the daily battles of our members with the APVMA in respect of
registration applications indicates otherwise. This is genuinely a case of he
who pays the piper not calling the tune—and sometimes not even getting to hear
the music.[48]
Evidence regarding perceptions of
undue influence
3.45
The Committee received some evidence that suggested the APVMA's funding
arrangements and relationships with industry compromised the authority's
independence. However, these submitters were not able to provide clear evidence
of instances that showed undue influence or bias, or regulatory capture.[49]
3.46
Gene Ethics held the view that:
All regulators have conflicts of interest when they depend on
cost recovery from corporate customers to cover their operating costs...Of the
APVMA's $35 million annual budget glyphosate‑based herbicides (GBH)
contribute about $1.5 million p.a. This may convey to the public the vivid
impression that our regulator has an interest in keeping glyphosate on sale.[50]
3.47
Gene Ethics went on to argue that there was a community expectation that
the APVMA be an objective and impartial referee with regard to disputed health,
safety and environmental issues. It made the point that the regulatory
activities of the APVMA should be conducted at arm's length from industry. It
continued:
But the main chemical industry lobby group, CropLife
Australia, views the APVMA as a reliable service provider and, in our opinion,
directly and indirectly exercises undue influence over both agvet chemical
regulatory policy and APVMA practice...It [CropLife Australia] notes that 85 per
cent of the chemicals that Australian farmers use are controlled by 16 of
CropLife's corporate members, and seven member companies own 100 per cent of
crop biotechnology products—that is GM cotton and canola.[51]
3.48
Friends of the Earth Australia similarly identified the funding
arrangement as a problem that had 'effectively created a client relationship
between the APVMA and industry, and that really needs to be decoupled'.[52]
3.49
The Australian Food Sovereignty Alliance suggested the cost recovery
model provided an incentive for the APVMA to encourage industry to create more
chemicals and had resulted in regulatory capture where the interests of
industry were put above those of the community:
The APVMA's 2012 Cost Recovery Impact Statement (CRIS) shows
APVMA are concerned with losing capital and, as a result of product evaluations
falling below their 40% target through application fees, increased fees for
industry. The logical operation of the APVMA in the current regulatory
environment would be to encourage companies to create products for their registration
in order to meet targets and increase capital...
A known outcome of regulatory capture is that regulation
becomes lenient, putting industry interests above the interests of those the
regulator should serve and protect, namely farmers, farmworkers, landscapers,
gardeners, everyday consumers and any ordinary citizen who comes into contact
with hazardous chemicals.[53]
3.50
The National Toxics Network suggested the APVMA did not act on existing
evidence, thus putting the community at risk. It argued that the agvet chemical
lobby were 'extremely powerful' and that they were getting what they want while
the 'community and the environment pay the price of continued registration and
use of dangerous pesticides'.[54]
3.51
Associate Professor Susan Wilson, amongst others, confirmed there was a
perception in the wider community that because of the cost recovery strategy,
and the actual need for industry to work closely with the APVMA, there was potential
for industry to exert undue influence on the application process. Associate
Professor Wilson contended that as the APVMA does not undertake any chemical
research—the majority of data used for assessments is generated by the
applicant or industry—this could also lead to a perception of bias.[55]
3.52
However, Associate Professor Wilson also stated there had definitely
been no loss of confidence in the independence of the APVMA and its ability to
undertake its regulatory functions 'from the more‑informed and academic
part of the community'.[56]
3.53
Some submitters called for either an arm's length separation between the
regulator and industry or for public funding of the APVMA. Gene Ethics, for
example, stated:
We would like the funding of the APVMA by the industry—and it
is overwhelmingly funded by the industry—to be much more at arm's length than
it is at the moment. Even though the money goes to Treasury, it comes back to
the APVMA. We think that the APVMA and other regulators like the OGTR, for
instance, should be funded from the public purse and that any revenues should
be delinked from the regulator that 'benefits' from the industry's input.[57]
3.54
This was a suggestion also raised by Associate Professor Wilson. While
she did not believe that there was undue influence, she recognised the
importance of creating trust within the community, stating:
It's a difficult problem to answer. Possibly by having some
component that's publicly funded or having an arm's length entity to manage the
fee payment rather than all of that being handled within that one grouping. There
is a loss of trust, especially with everything that's in the media at the
moment. Building community trust and building community understanding would
help significantly.[58]
Access to chemicals and veterinary medicines in Australia
3.55
The Committee was told that several factors discouraged some companies
from applying to either register their products in Australia, or reduce the
uses for which they applied. These factors included the small size of the
Australian market (approximately 1.5 per cent of the global market), the fact
Australia is no longer on the global priority list for pesticide and veterinary
medicine investment in commercialisation, and the cost of registration.[59]
3.56
Grain Producers Australia provided research comparing the first
registered labels between Australia and the United States for several
compounds. Although a direct comparison was not possible as the particular
local conditions and regulations that led to the approvals was not clear, the
results are summarised in Table 3.2.
3.57
Table 3.2 shows that in the larger market of the United States, in some
cases applicants register a significantly larger number of uses.
Table 3.2—Comparison of first
registered labels between Australia and the United States
| Compound |
Number of
initial registered uses |
| Australia |
United States |
| Penflufen |
2 |
10 |
| Sedaxane |
4* |
4* |
| Penthiopyrad |
10 |
22 |
| Fluxapyroxad |
1 |
21 |
| Prosulfuron |
1 |
3 |
| Saflufenacil |
1 |
13 |
| Pyroxasulfone |
2* |
2* |
| Foramsulfuron |
1 |
2 |
* registered uses differed;
Grain Producers Australia.[60]
3.58
GrainGrowers explained the problems caused by various factors in the
Australian marketplace:
Given the small size of the Australia market, and the extent
of global chemical development and manufacturing, Australian farmers are
inherently disadvantaged in the range of chemicals they can access compared to
growers in other countries. Put simply, the lower commercial return available
in Australia compared to larger markets results in products never being
submitted for registration or a delay in submitting for registration in
Australia.[61]
3.59
Grain Producers Australia added its concerns over the negative impact of
the small market in Australia, arguing:
Global multinational companies face a poor rate of return on
commercialisation investment compared with major developing markets including
Brazil and China...
Growers are impacted by the 'double whammy' of lack of new,
more advanced pesticide options delivering productivity outcomes, plus
accelerated selection pressure for pesticide resistance due to a narrow pool of
products.[62]
3.60
From the perspective of chemical companies and in response to
suggestions about raising the costs of registration in Australia, CropLife
Australia suggested to the Committee:
...the Australian market is one‑tenth the size of the US
market, but the regulatory system costs the same, dollar for dollar. So we
immediately have a serious hurdle in terms of ensuring that Australian farmers
have access to products in the same timely manner as around the world. A new
chemical product, from beginning to end, now costs more than US$256 million and
11 years in R&D to bring to market, and a third of those costs are now
directly related to regulatory systems. So the reason that we are cautious on
adding any new costs to the regulatory system is that it has genuine, real
consequences to farmers' access to innovation in the first place and what they
pay. It's not this view that it would just be the chemical companies that pay
for it. It builds into the whole of the costs that end up on farm for
production.[63]
3.61
The APVMA has recognised that registration and assessment costs can
outweigh the benefits of commercialising new products for certain low‑volume
use chemicals, or in emergency situations. The minor use permit system allows
chemicals that are not registered to be permitted for 'minor uses'. This permits
the use of agvet chemicals without the full cost of registration.[64]
3.62
The use of this system was explained by AgForce Queensland:
The APVMA has regulatory provisions for off‑label use
of agvet chemicals through emergency and minor use permits. This regulatory
pathway must be retained to enable rapid response to new biosecurity pest, weed
or disease incursion. For example, agvet chemical companies are reluctant to
invest in changing product labels for emerging weeds that must be rapidly
controlled. Often there is very little return on investment for agvet chemical
companies to add certain weed species to labels for rangeland weeds in non‑crop
areas and certain application methods for roadsides, waterways. The APVMA minor
use permit system can accommodate these niche situations.[65]
3.63
Some submitters argued that both the fees and data requirements for
minor use permits remain too onerous and undermined the intent of the program to
protect consumers and prevent industry loss.[66]
Associate Professor Christopher Preston also advised that the intent of the
program was not always realised:
Australia has a permit system that is regularly used to allow
additional products to be used by growers of minor crops; however, that system
has the intention that the permit uses will be moved onto labels. In practice
this too often does not happen due to a lack of willingness by registrants to
invest in minor crop use.[67]
3.64
With regard to the costs of minor use permits, CropLife Australia
stated:
In the case of minor and specialty crops, this cost of
developing the necessary supporting data to meet due diligence and regulatory
requirements far exceeds any potential return on investment. Similarly, the
financial burden on grower groups to generate the necessary data to support an
application for a minor use permit is often prohibitive. As a result,
Australian producers of specialty food and minor crops are faced with numerous
challenges in managing plant pests, weeds and diseases.[68]
3.65
This view was supported by Cotton Australia, which argued the process to
apply for permits was not efficient and had the potential to endanger safety
through off‑label use:
Cotton Australia applies for a number of permits on behalf of
its growers to cover specialty use situations that are not covered by
established approved chemical use patterns. The lengthy time frames (often over
12 months) for having these minor use permits approved, or amended, is
prohibitive to productivity. This is especially the case when emergency permits
for new pest outbreaks are required. The prohibitive cost and time frames
results in producers having to use products 'off‑label'. The use of
products in an unregulated, off‑label situation creates potential risks
with product safety, efficacy and resistance management for the whole
Australian community.[69]
3.66
Submitters suggested a number of ways to deal with the issue of high
costs. For example, Grain Producers Australia stated:
...the application fee should be set at a level that balances
the ability for the APVMA to recover a portion of the cost of assessment
upfront while not acting as a significant disincentive for users to seek a
minor use permit for off‑label use of an agvet chemical.[70]
3.67
GrainGrowers argued that Australia's chemical assessment and registration
processes should be made as efficient and rigorous as possible to allow farmers
to access new chemistry in a timely manner to maintain competitive advantage. GrainGrowers
further observed:
The APVMA does not rely on international registration of products
to a sufficient extent, thus duplicating the assessment of the same product's
registration in Australia despite it being registered in many other countries.[71]
3.68
The Western Australian Farmers Federation encouraged the APVMA to refine
the application process for minor use permits through the adoption of a digital
application process and a more pragmatic approach to the detailed evidence
required for the application.[72]
3.69
Agribusiness Australia highlighted an existing DAWR program that assisted
with the costs of registrations for minor uses: the Improved Access to Agvet
Chemicals Initiative. Agribusiness Australia stated the program helped
alleviate regulation‑generated market failure. It was noted this type of
market failure often resulted from the high costs associated with registering
products for minor uses that could not be offset by volume of sales.[73]
3.70
The Improved Access to Agricultural and Veterinary Chemicals Initiative,
which was established in 2014 (with $8 million in funding to the end of the
2017–18 financial year), had several purposes, including:
-
establishing an agvet collaborative forum to allow stakeholders
to share access needs with each other and chemical companies;
-
creating an official Australian crop grouping list and associated
APVMA guidelines;
-
migrating some APVMA permits to product labels; and
-
developing an assistance grants program to help fund the
generation of sufficient data to support applications to the APVMA.[74]
3.71
Some submitters presented an alternative to promoting the increased
availability of chemicals, arguing for the adoption of alternative and smaller
farming practices over seeking new chemical solutions.[75]
The Australian Food Sovereignty Alliance, for example, argued:
Despite the glaring need for a transition to ecological agriculture,
agvet chemical use is increasing. Governments and regulators continue to
facilitate pesticide industry claims to dictate the future of our food system.
The number of small farms in Australia is decreasing, with only 10% of farms
producing over half of our agricultural output, and more large farms consolidating
to respond to pressures on the agribusiness industry.[76]
3.72
The Australian Food Sovereignty Alliance also called for government
support for the development of:
...businesses that create, sell and use sustainable
alternatives to agvet chemicals, including agroecology and regenerative agriculture,
organic alternatives to weed, insect and other pest management, and traditional
agricultural pesticides, herbicides, fungicides and potentially veterinary
solutions.[77]
Greater efficiency through the use of international data
3.73
A number of submitters argued that more efficient and faster processing
of applications would occur if the APVMA made greater use of international data
and assessments within a risk‑based assessment framework.[78]
3.74
However, in calling for greater acceptance of international data, submitters
were not of the view that Australia should automatically recognise or abide by
the decisions of regulators from other jurisdictions.[79]
3.75
The NSW Farmers' Association emphasised the need for an Australian
regulator to consider the unique circumstances of Australian agriculture and
the applicability of particular chemicals or veterinary medicines to the
Australian environment. The association stated there had to be:
...an appropriate balance between referencing the approval
process that has been relied upon internationally and the science that has been
used to underpin some of those things, but then to make sure that that doesn't
mean that when, for example, a European regulator coughs, Australia necessarily
catches a cold when it comes to the application of that chemistry in this
market.[80]
3.76
It was suggested by the NSW Farmers' Association that the automatic
acceptance of decisions made in other jurisdictions could lead to less stable
decision making and increase the risk of the politicisation of the approval of
chemicals for use by the farm sector.[81]
3.77
The trade implications of using international data were identified by the
National Farmers' Federation, which stated:
The APVMA also does a trade assessment, a market assessment,
when it assesses chemicals, and that's important to note, because, I think you
would acknowledge, other regulators don't necessarily service the same markets
that Australia does. There are certainly members within our remit that would
like to see that trade assessment remain, even with the acknowledgement of
international processes. And that's pretty important. You can imagine a
scenario where a product is approved in one country but they may not export to
the same markets we do, so that's important to be taken into account in that
process.[82]
3.78
The APVMA previously agreed it was necessary to consider Australian
situations and circumstances, providing the example that conditions placed on
herbicides used in the EU would probably not be automatically transposed to
herbicide use in tropical Queensland, due to requirements of state legislation
to protect the Great Barrier Reef.[83]
3.79
The Committee was informed the APVMA already participated in a global joint
registration program, which aimed to improve the efficiency and effectiveness
of the registration process by sharing data amongst participants. It also had a
mutual recognition agreement with some regulators from Europe, Canada, New Zealand
and the United States with regard to manufacturing standards.[84]
3.80
Over recent years, the APVMA has been moving towards making greater use
of international data and assessments and has made provisions for international
work sharing. The regulator is participating in an Organisation for Economic
Cooperation and Development process to establish a framework for global joint
reviews; and has undertaken collaborative regulatory assessments of veterinary
medicines with Canadian and New Zealand authorities.[85]
3.81
Further, APVMA CEO, Dr Parker, recently issued a direction that detailed
the expectations of the APVMA in relation to the use of international data,
standards and assessments.[86]
This legal direction requires APVMA staff to maximise the use of international
assessments supplied with an application in order to improve the efficiency and
timeliness of the APVMA's assessments.[87]
Navigation: Previous Page | Contents | Next Page