Australia's cost recovery arrangements for export certification : implications for Australian agriculture

The Department of Agriculture and Water Resources is currently redesigning its cost recovery arrangements for export certification services. The Cost Recovery Taskforce requested that ABARES analyse the effect of full cost recovery of the cost of export certification services on the competitiveness of Australian agricultural exports. The report: • estimates how full cost recovery affects the value of Australia's agricultural and fisheries exports • considers the farm-gate impact of exporters passing costs on to producers under a range of scenarios • investigates cost recovery arrangements in competitor countries for major export commodities. Key Issues

ABARES modelling and analysis indicates that full recovery of the department's export certification costs has a small impact on the value of agricultural exports - less than 1 per cent for each of the export commodities considered. • The largest reduction in value occurs in beef and sheep meat exports, which are estimated to decrease by 0.79 per cent and 0.54 per cent, respectively. Beef and sheep meat exports have the highest industry cost of export certification relative to the value of exports. ABARES modelling also indicates that export certification charges have a small impact on farm gate receipts. • Livestock producers' farm gate receipts are estimated to fall between 0.57 and 0.74 per cent. In dollar terms, the impacts range from about $1509 for a typical sheep farm to about $2440 for a typical sheep-beef farm. • Cropping and dairy producers' farm gate receipts are estimated to fall by up to 0.23 per cent. In dollar terms, the impacts range from about $648 for a typical dairy farm to $1884 for a typical wheat and other crops farm. • Horticulture farm receipts for macadamia, almond and orange producers are estimated to fall between 0.11 and 0.28 per cent, based on the average volume of product grown per farm. In dollar terms, the impacts range from $425 for a macadamia farmer and $2415 for an almond farmer, based on the average volume of product grown per farm. • Horticulture farm receipts for table grape producers are estimated to fall by 0.38 per cent ($1636) based on the average volume of product grown per farm. ABARES investigated the cost recovery arrangements of Canada, Chile, Germany, Ireland, the Netherlands, New Zealand, Poland, Thailand and the United States. • All these countries have arrangements in place to recover some or all of the costs of providing export certification services.