- Print Friendly - Help

Animal Products Act Levies

1 Introduction

This paper explains how Animal Products Act levies support the work of the New Zealand Food Safety Authority (NZFSA).

The NZFSA provides a range of services to animal products operators under the Animal Products Act 1999 (Animal Products Act). The actual costs of NZFSA services provided directly to animal products operators (for example approvals, accreditations, registrations, listings, verification, electronic certification and the issuing of official assurances) are therefore recovered from those who request them.

The animal products operators’ levies relate to three programme areas.

• The New Zealand Standards

• The Export Standards

• The Market Access

2 The work of the programme areas

The work of the three programme areas supports the development and maintenance of the regulatory regime for operators under the Animal Products Act. This includes:

• the setting of food safety, export and related standards

• specifications and guidance material with which animal product operators must comply under their Risk Management Programmes (RMP), Regulated Control Schemes (RCS), and Overseas Market Access Requirements.

Work also includes the development and maintenance of standards and systems necessary to support the regulatory regime such as verification, approvals, official assurances, and monitoring and review.

So, the programmes provide for safe food and for overseas market access. Because operators are the primary users and beneficiaries of the programmes, Government policy is to recover the cost of this work directly from Animal Products Act operators.

Further information about the work NZFSA undertakes in each programme area is outlined below:

2.1.1 New Zealand Standards Programme

NZFSA develops and implements, evaluates and reviews safety standards for production, processing, transportation, storage and sale of food and food-related products in New Zealand. This includes the following activities which are supplied to the many animal product operators/processors covered under the Animal Products Act:

• setting safety standards to be met by operators/processors with an RMP or an RCS

• developing guidance material for the different industry sectors to assist them with compliance to safety standards

• setting verification requirements to ensure that safety standards are met

• reviewing and monitoring compliance of standards specifically set for the different sectors of the animal products industry

• developing - and oversight of - the residue monitoring programmes for the domestic market for industry sectors such as the meat and poultry sectors.

2.1.2 Export Standards Programme

NZFSA develops and implements systems and processes for export food and food-related products. It also develops and implements verification standards and verification processes for export requirements, and manages the provision of official assurances for animal product exports.

NZFSA also develops and has oversight of the residue monitoring programmes for export such as meat, dairy and bee products residue monitoring programmes. These are necessary to meet overseas market access requirements, to assure the New Zealand Government that the requirements have been met, and to provide systems and requirements to safeguard New Zealand’s official assurances.

2.1.3 Market Access Programme

Under market access services, NZFSA negotiates market access conditions and establishes certification requirements with the relevant authorities of countries importing New Zealand’s animal products. This includes managing bilateral agreements, trading partner relationships and equivalency negotiations.

The market access programme also provides strategic and operational input into the export standards programme, as it affects trade and NZFSA’s bilateral relationships.

3 How costs are calculated

NZFSA has split the animal products industry into a number of sectors based on products or processing type (meat, venison (deer), wild game, dairy, poultry, wet fish, shell fish, ostrich, bee products, eggs, stores, animal feeds, dual operator butchers, hides and skins, rendering, and other secondary processors). For each of those sectors total costs are calculated by:

• costs of estimated time spent by NZFSA staff on each sector

• the actual cost of specific programmes or services for each sector, for example, the cost of a residue monitoring programme

• a proportion of NZFSA overheads (e.g. rent, electricity, corporate services such as finance and human resources)

• a proportion of the cost of setting generic standards or generic activities (which apply to all animal product sectors).

4 How costs are charged to RMP and RCS operators under the Animal Products Act

Once the per sector programme costs have been calculated, NZFSA then determines how they are recovered from animal product operators.

The Animal Products Act equity criteria require that costs of services be recovered from users or beneficiaries in proportion to the use of or benefit received. With NZFSA’s programme area costs, the primary users and beneficiaries of the services are all operators within a sector. NZFSA needs to ensure that the costs are recovered as equitably as possible from all operators.

NZFSA considers that an equitable measure of use and benefit is in proportion to operator size or throughput. This is because the cost of the programmes’ regulation is spread in proportion to business size and has an even impact on a per unit of output basis. For most primary processors such as meat, venison (deer), ostrich and emus, poultry, fish and bivalve molluscan shellfish, levies are based on processing throughput. For dairy, differential charges are applied based on raw milk throughput.

However, in reality it is not always possible to implement proportional charging. For some sectors, it would be difficult and costly to find a common unit measurement and collection system. Also, for sectors where a very small amount of revenue is to be recovered, the cost of establishing and administering a levy system would outweigh the benefits. For these situations NZFSA considers that fixed annual fees are more appropriate and efficient recovery method. Currently, fixed annual charges apply to the animal feed, bee products, egg products, secondary processing, hides and skins, wild game, rendering, dual operator butcher, and store sectors.

5 Business Rules

The web link to access NZFSA’s business rules information in relation to the Animal Products Act levies is:

http://www.nzfsa.govt.nz/animalproducts/legislation/08-09-business-rules-apa.htm