The agricultural levy system is a partnership between government and industry that has been in place for more than 30 years. It allows industries to fund priorities for identified purposes that could not be achieved by many primary producers on their own. The funds raised from the levies assist industries to drive growth, maintain competitiveness and manage risks to ensure their ongoing contribution to the Australian economy.
At the request of primary industries (agriculture, fisheries and forestry producers and their representatives), the government imposes levies and charges (levies) on agricultural products to facilitate industry investment in strategic activities. Unlike other taxes, these levy funds are disbursed by the Department of Agriculture, Fisheries and Forestry to levy recipient bodies to invest in the activities they were imposed to fund.
The levy system allows primary industries to collectively invest in research and development (R&D), marketing, biosecurity activities, residue testing and biosecurity emergency responses.
In March 2023, ABARES published its report, Agricultural research and development investment in Australia, highlighting that research and development (R&D) continues to yield high returns, with estimates indicating that each additional $1 of investment could generate a return for farmers of $7.82. The report demonstrates that R&D investment continues to be fundamental to the delivery of new technology and knowledge into the Australian agricultural system and is an important driver of productivity growth, competitiveness and the sustainability of our agricultural sector.
It is compulsory to pay the levies that government imposes in legislation. By having a compulsory levy, primary industries can ensure that all levy payers contribute equitably and benefit from the levy funded activities.
Each year the department disburses around $800 million to 18 levy recipient bodies, made up of around $500 million in levies and charges and $300 million in Commonwealth matching payments for eligible research and development activities.
Levy settings are determined by primary industries. Any new or amended levy is driven by primary industries. Refer to the Levy guidelines for details on how primary industries may put forward a proposal to set or amend a levy or charge.
There are currently more than 110 levies and charges are collected on more than 70 commodities across the agriculture, fisheries, and forestry sectors.
Australia’s statutory levy system was established in 1989 and includes both levies and charges depending on whether the product is sold in Australia or exported. Currently, more than 50 Acts and legislative instruments underpin the levy system. These instruments are fundamental to the operation of the levy system as they impose levies and charges and establish levy recipient bodies (LRBs).
The current levies legislative framework is under review. Refer to Streamlining and Modernising Levies Legislation for more details.
How the levy system works
The levy system is based on the Australian Government’s exclusive power to impose taxes across Australia.
- Levies are duties of excise (or taxes) on certain goods produced, manufactured, sold or distributed in Australia.
- Charges are duties of customs (or taxes) on goods imported into or exported out of Australia.
The process for collecting and distributing levies involves 4 main stages:
Further information on each of the key players and their role in the levy system is available here.
Information about the types of levies and charges and the organisations who receive them is provided below. Information about how levies and charges are invested can be found on the recipient organisation’s website.
Types of levies and charges
There are 5 purposes for which agricultural levies and charges are established. Levies must be used for the purpose for which they were collected.
Research and development levies
Research and development (R&D) levies:
- are collected to allow industry to invest in systematic experimentation and analysis in any field of science, technology, economics or business.
- are collected to increase knowledge, build on industry objectives, conduct extension activities or improve any aspect of the production, processing, storage, transport or marketing of the industry’s products.
- are invested by research and development corporations (RDCs) on behalf of industry.
- are collected to fund industry marketing, advertising or promotion of industry products.
- are invested by RDCs on behalf of industry.
Biosecurity activity levies
- are collected to fund industry member contributions to Plant Health Australia (PHA) and Animal Health Australia (AHA).
AHA and PHA facilitate a national approach to enhancing Australia’s animal and plant health status, through government and industry partnerships for pest and disease preparedness, prevention, emergency response and management.
Biosecurity emergency response levies
Biosecurity emergency response levies:
- are collected to repay to the Australian Government, over a period of time, an industry’s share of the costs of a response to a pest or disease incursion under the Emergency Plant Pest Response Deed (EPPRD) and the Emergency Animal Disease Response Agreement (EADRA), where the government has underwritten the industry’s contribution in the first instance.
- are often set at nil, and only activated if an emergency response is required. Alternatively, they can be set at a low rate to raise funds pre-emptively for use during an emergency response.
New emergency response agreements developed to cover pest and disease incursions not currently covered by existing agreements will include similar provisions to the EPPRD and EADRA to enable the use of biosecurity emergency response levies to repay the costs of emergency responses.
National Residue Survey levies
National Residue Survey levies (NRS):
- are collected to fund residue monitoring activities undertaken by the NRS to manage the risk of chemical residues and environmental contaminants in Australian animal and plant products.
- are used by the NRS to assist participating industries to demonstrate good agricultural practice and meet importing country requirements.
NRS levies are administered by the Residues and Food Branch in the Department of Agriculture, Fisheries and Forestry.
Key players in the levy system
Many people and organisations play a part in the levy system, including:
Levy payers are responsible for paying levies and are generally growers, primary producers, processors, importers or exporters of leviable goods.
Collection agents, sometimes called intermediaries, are generally responsible for collecting levies and submitting levy returns to the department on behalf of levy payers.
Collection agents operate at identified narrow points in the supply chain that most, if not all, leviable products flow through. These narrow points are generally the most cost-effective way to collect levies.
Levy recipient bodies
Levy recipient bodies are responsible for managing and investing levies in line with industry priorities.
There are 18 levy recipient bodies, including five statutory RDCs, 10 industry-owned RDCs, AHA and PHA, and the NRS (part of the Department of Agriculture, Fisheries and Forestry).
RDCs also receive and invest the matching funding that government provides for eligible R&D activities up to set limits.
Department of Agriculture, Fisheries and Forestry
Department of Agriculture, Fisheries and Forestry is responsible for:
- administering the levies legislation, including receiving levies and levy return forms from collection agents, paying the levies to specified levy recipient bodies and conducting compliance inspections. The department recovers the cost of conducting these activities.
- providing advice and support to industry representative bodies on the policy and processes for establishing or amending a levy and advising the responsible Minister on industry levy proposals.
Industry representative bodies
Industry representative bodies generally propose and present a levy proposal to industry and present the agreed upon proposal to the department and the minister of the day.
Responsible Minister is the Minister with responsibility for agriculture. The responsible Minister receives levy proposals and determines whether majority industry support is evident, and decides whether to progress changes to levies, or introduce new levies, through legislation.