GIA & Biosecurity

GIA & Biosecurity

PVNZ Special General Meeting - 23 November 2017

Take notice that the following Motions will be put to a Special General Meeting to be held at the South Rakaia Hotel, Rakaia Canterbury at 7:30pm on Thursday 23 November 2017.

1. That Process Vegetables New Zealand (PVNZ) members support the signing of a Government Industry Agreement Deed ("GIA") by Horticulture New Zealand for PVNZ on behalf of its members.

2. Process Vegetables New Zealand members support the proposal for a separate biosecurity levy, to be set by the PVNZ Board at its discretion, which will initially be set at a zero rate with a maximum rate of 0.50% of gate sales value, for application to GIA readiness and response related expenditure, and only applied if at the Board's discretion such expenditure is required.

3. That Process Vegetables New Zealand members support and approve the PVNZ Board making decisions on behalf of members in respect of negotiating and signing Operational Agreements as may be required under the GIA and authorising payment of other related biosecurity expenses.

FAQs for Process Vegetables NZ  (PVNZ)  - Growers

Should Process Vegetables New Zealand join the Government Industry Agreement (GIA) for biosecurity readiness and response? The following questions and answers are for your information and guidance.


General Questions & Answers

Q – Why are we (PVNZ growers) being consulted on Process Vegetables New Zealand joining the Government Industry Agreement for biosecurity readiness and response?

A - To Join the Government Industry Agreement (GIA), Process Vegetables New Zealand (PVNZ) must demonstrate to the Government that it has a mandate to enable Horticulture New Zealand to represent the industry on biosecurity decision making. Consultation meetings are a good way to hear views and for the Board to understand the mandate. If needs be voting may take place.


Q - What am I being asked to decide on?

A – All members of PVNZ are being asked to decide on the following three questions:

  • Do you support HortNZ signing on behalf of PVNZ the Government Industry Agreement for Biosecurity Readiness and Response (GIA) Deed on behalf of New Zealand commercial process vegetable growers?
  • Do you support the way PVNZ has proposed to represent the sector’s views during joint decision making under GIA?
  • Do you support the establishment and implementation of a Biosecurity levy (Noting that this Levy would initially be set at zero with a maximum rate of 0.5%)

By answering these questions you will be able to provide clear feedback to PVNZ regarding how you think it should engage with the government on biosecurity on your behalf.


Q - Why is biosecurity important?

A - A strong biosecurity system reduces the risks from the entry of pests and diseases. The New Zealand process vegetable industry has largely developed free of many of the pests and diseases found in other countries. This relative freedom creates a unique competitive advantage. New pests and diseases can undermine this advantage and create a significant financial risk to growers and processors at both the growing and the industry level. New pests can not only lead to loss in production but also in a reduction in the quality processed vegetables, and/or the loss of export markets (such as peas due to Pea Weevil).


Q - What role does the government play in biosecurity?

A – The government sets biosecurity rules and regulations pre border, at the border and post border. The government’s focus is on managing the greatest risks using a suite of tools, including detector dogs, x-ray machines, risk profiling operations and treatments. MPI annually manages biosecurity risks across 700,000 containers, 90,000 vehicles and pieces of machinery and 35 million items of mail. Its dogs sniff the baggage of 6 million travellers. Under the cost and decision sharing arrangements MPI, as part of the Fruit Fly Council, is one party in the arrangements for setting and monitoring 7400 traps for fruit flies.


Q – What is the Government Industry Agreement?

A - The GIA is a new approach to biosecurity risk management in New Zealand with government and industry working together as partners. The GIA approach was provided for under the Biosecurity Act 1993. To date there are 13 industry signatories including horticultural organisations such as Kiwifruit Vine Health, Pipfruit New Zealand and Vegetables New Zealand. More industry organisations are preparing to join GIA. As partners industry organisations and the Government share decision making, costs, and responsibility in preparing for and responding to biosecurity incursions. This approach gives all partners the confidence that the best decisions are being made about managing biosecurity.


Q – What influence would we get from signing up to the GIA?

A – GIA Deed signatories get joint decision-making rights in post border readiness and response in return for cost share. Joint decision-making does not extend to decisions about pre-border or border biosecurity. Pre-border decisions are made between governments while decisions at the border are made by MPI as the regulator of NZ’s biosecurity rules. The GIA Deed makes provision for signatories to work in collaboration with each other and other stakeholders to improve biosecurity outcomes through enhanced engagement and better influence across the biosecurity system.


Q – Why can’t we stop all biosecurity risks offshore or at the border? Surely the government should do more in this area.

A - It is not possible to stop all biosecurity risks from entering New Zealand while enabling trade and travel. The Government’s investment in biosecurity concentrates on managing the highest areas of risk.


Financial Questions


Q - How much does a biosecurity response cost?

A – At any one time there are approximately 40 biosecurity responses underway in New Zealand. Many of these responses cost very little. On average a significant response costs approximately $100K. A large response, such as the 2014 detection of a single fruit fly in Whangarei, can cost between $1 million and $2 million. A major response such as the 2015 incursion of a breeding population of fruit fly in Grey Lynn Auckland can cost up to $20 million and run for an extended period of time.


Q – How would readiness and response costs be shared between industry and government under the GIA?

A - Any cost-shares for readiness and response activities with a regard to a specific pest, group of pests or industry sector would be agreed by GIA signatories and recorded in an Operational Agreement. Where possible, cost-shares will be determined in advance before undertaking any readiness or response activities for an unwanted organism.

Industry will pay a maximum of 50 percent of the total cost of the readiness and response activities. Each cost-share represents an assessment of the proportion of public to industry benefit that is likely to accrue in avoiding the impacts of the unwanted organism. (See figure 1)

Where there are multiple industry signatories to an Operational Agreement, the industry cost-share will be determined based on the proportional benefits to each industry (including any non-signatory beneficiaries) in avoiding the impact of the unwanted organism.

Industry signatories can set a fiscal cap, which sets a limit on its funding liabilities for cost shared readiness and response activities. The amount proposed for a signatory‘s cost-share may not exceed the fiscal cap of that signatory, unless agreed in writing by the Operational Agreement signatories. Cost Sharing does not apply until July 2017. Up until this time the government pays 100% of the response cost.


Q - Shouldn’t the people who exacerbate biosecurity risk pay for biosecurity risk management?

A – The government has acknowledged that trade and travel exacerbate biosecurity risk. To account for this MPI has agreed to cover a fixed 20% proportion of readiness and response costs. The industry cost-share (the portion of the readiness or response activity that is eligible to be cost shared between Deed Signatories) is applied to the remaining 80 percent of the readiness/response activity costs (see figure 1).


Q – How will PVNZ pay its share of response costs?

A – PVNZ will fund response activities from existing Reserves, or by borrowing from the Crown, and then recover funds from growers using the proposed Biosecurity Levy to repay response costs.  


Q - The PVNZ proposal includes the provision to establish a Biosecurity Levy set it at zero. Why do we need this?

A – The Government requires that GIA Deed signatories can pay for any readiness and response activities that they have agreed to. Establishing and implementing a biosecurity levy provides the Government with assurance that even in the unlikely event of a major response, PVNZ has a means to fund its share of response activity costs. During a major response it is critical that PVNZ has a seat at the table making strategic response decisions that provide most benefit to members. If we can’t afford to pay our way we lose those decision making rights. In the event of a major response PVNZ anticipates borrowing funds to cover costs (up to an established fiscal cap) and then using the biosecurity levy to repay the loan over a period of time. The rate of loan repayment would be determined on a case-by-case basis but is likely to be a maximum of 5 years. This means that there is potential to minimise repayments immediately following a major response when the industry is still recovering.


Q – What happens if we don’t sign the GIA?

A – If the industry chose not to sign the GIA Deed, MPI and other Deed signatories may choose to try to recover costs of future readiness and response activities from PVNZ members, if they think those activities benefit members of the industry. Signing the GIA Deed ensures that this cannot occur. In GIA, it pays to belong.


A group of Product Groups (Ie Pipfruit, Kiwifruit NZ, Vegetables NZ Inc. PVNZ)  get together to sign an Operational Agreement relating to Brown Marmorated Stink Bug (BMSB). If PVNZ did not join that Operational Agreement and a response to a BMSB incursion was initiated, the signatories might decide that the process vegetable industry was a beneficiary, and should cover 10% of the total response cost. PVNZ would have to pay this cost – whether or not the industry really received 10% of the benefit. If PVNZ instead had joined the BMSB Operational Agreement it would be able to help determine what share of any benefit accrues to process vegetable growers, and what response, if any, should be launched.