28 Feb 2012

MAF says commodity levies on the rise

6:32 am on 28 February 2012

The Ministry of Agriculture and Forestry says commodity levies are on the rise as industries without them see how well they work.

Under the Commodities Levies Act a majority of members in an industry must vote in favour of the payable levy for it to become compulsory.

It is used to fund beneficial industry activities and must be voted on every six years.

There are now 26 such schemes in the rural sector covering the fishery, wine, horticulture and agriculture industries.

Senior policy analyst at MAF, Prakash Narayan, says there has been steady growth since the first one was set up in 1990.

He says industries that previously did not have a levy saw other industries benefiting by using the levy money to leverage funding from other sources to fund industry activities.

Secondly, the Commodities Levies Act has strong accountability provisions for levy payers to decide whether there is to be a levy order, the level of annual spending and also to decide on levy rates.

He says levy orders last six years and if levy payers decide the organisation's performance is poor, or they are dissatisfied with the performance, they have the opportunity to vote against the levy.

Mr Narayan says two new commodity levies are being planned for the forestry and kiwifruit industries.