Action Needed On The Horse Industry Levy

On the 23rd of April the State Agricultural Ministers met in Darwin as the Primary Industries Ministerial Council (PIMC) to discuss, in part, options for handling future Exotic Disease Incursions that would affect the Horse Industry.

A vote was tabled at the meeting to allow for voluntary EI vaccination of horses in Australia. Owing to strong opposition from the domestic (non racing) sector of the Horse Industry the vote was not passed. The PIMC has come back to the Horse Industry and said that if it wants the government’s assistance should a future outbreak occur the industry must pull together and find a way to agree on a Horse Industry Levy. The PIMC had three important messages for the Horse Industry. Firstly: maintenance of Australia’s strong cooperative approach to biosecurity was vital to effective responses to any future incursions of exotic pests and diseases. Secondly: by 1 December 2010 the industry needs to have a commitment to a national levy and to inclusion of the industry under the EADRA (Emergency Animal Disease Response Agreement). Thirdly: there would be no nationally cost shared response to any exotic disease incursion if a Levy agreement is not signed. This means that should another EI incursion happen or, for instance, should the Hendra virus mutate and become more widespread, there would be no government assistance to the horse industry. Differences between other agriculture industries and the horse industry has made introducing a levy to the horse sector more complex. For instance, cattle, poultry, pigs etc have well documented numbers so it is easier to quickly understand how many animals are involved should an outbreak occur. By comparison, no one really knows the exact number of horses within the horse industry. The turnover of farming animals is also a known quantity, for example, the number of chickens producing eggs on a daily basis, the number of cows producing milk, or the number of cattle being raised for beef. Horses, on the other hand are more often used for private, non business venture, and their turn over is slower because they can live for decades. Agriculture has set business groups, poultry for eggs, cows for milk, cattle for beef, pigs for meat etc. The breeding and use of horses covers a wide range of activities, not all of which are related to business production. The Australian Horse Industry Council has been working with Department Agriculture, Fisheries and Forestry to identify levy mechanisms that are possible for the purpose of the handling of emergency animal disease outbreaks. We should bear in mind that an emergency animal disease outbreak is not just something like the EI incursion we experienced in 2007. It can apply equally to local exotic diseases like the Hendra virus. There were 3 key points to the advice received from DAFF. 1.Different types of levies can be imposed on the industry at the same time. For example, a horseshoe levy could be imposed in addition to an event registration levy. 2.A levy can be imposed on multiple occasions in respect of the same horse. For example, a levy can be imposed each time a horse registers for an event. 3.Different rates of levy can be set for different industry sectors. For example, the levy for racing plates could be higher than for other horseshoes. The AHIC has been trying to explore way in which the number of units to be levied will be as high as possible and the levy per unit as low as possible. This must be linked to the audit process to ensure that the process is simple and the audit costs are as small a percentage of the levy collected as possible. The levy is for emergency animal disease and would be zero rated until there is a disease incursion. This means that the horse industry would not pay a levy until after an emergency animal disease event occurs. Options for levies
This can be imposed on horses registered with organisations as occurs with the racing sector, some horse organisations which have competition cards and breed societies. Registration of horses is not practiced across the whole industry which means some organisations would need to alter their current administration practices to be able to comply. {sidebar id=3}The organisations would be the level at which the levy was imposed and costs would be recovered in the registration fees. This means there would be no need for receipts for individual horses. It may be possible to link human membership of organisations where that membership is linked to horse ownership, as the mechanism an organisation might use to have the levy imposed. This would be simpler than horse registration and it would probably pick up many extra organisations. B. Event Registration Levy
It is possible to levy a horse each time it goes to an event such as a race meeting, show, competition, rally. The more times a horse travels to an event the greater risk it becomes. To make the audit process simple the levy would have to be imposed on the event organisers who would recoup their costs in the pre-entry paperwork in a similar manner to facility fees, yard costs, etc. The levy costs per participants would be remitted by the event organisers to their State or National Body who would pass them on to the levy collection services. C. Horse Shoe Levy
This has the advantage of higher unit numbers which enables the levy cost per unit to be small. It is thought that between 700-800,000 sets of shoes are sold each year which would cover approximately 100,000 horses. The levy could be applied when a) fixing a shoe, b) manufacture of a shoe or c) sale of a shoe. For audit purposes the simplest levy point is at the importation level. This will require careful negotiation with the importers to ensure there is as little impact on their day-to-day business as possible. D.Wormer Levy
The great appeal of this levy is the widespread use of worming programmes across the many different sectors of the horse industry and it has the ability to include horses that are not otherwise registered with a society or organistion. The unit numbers would be the greatest for any common transaction in the horse industry. To make the audit process simple the levy would need to be imposed on the drug companies or wholesalers who would recoup their costs through small increases in the costs to customers (it has been suggested that the cost might be around the 50c per wormer mark). Further levy options would be welcome but any related to gambling will be non-starters. The Horse industry has a few months to get its act together under PIMC’s commitment to introduce legislation and to work with the industry organizations in all jurisdictions and members of the Australian Parliaments to ensure broad support for timely progression of the funding legislation. Please send comments to secretary@horsecouncil.org.au For further information visit the Australian Horse Industry Council