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APVMA Cost Recovery Review Aims to Deliver Benefits to Farmers

7 January 2009

This Hot Topic has been revised based on additional information.

The Australian Pesticides and Veterinary Medicines Authority (APVMA) has recently proposed alterations to its cost recovery arrangements that will see chemical companies paying more to initially register their products and then to maintain their registrations.

These proposals are contained in the Draft Cost Recovery Impact Statement (CRIS) released on 3 December 2008 and relate to increased wage and supply costs but also to planned service level improvements.

Will these proposals lead to increases in costs for farmers?

The APVMA’s costs are recovered from chemical companies rather than farmers and, generally speaking, the proposed changes will have little impact on the cost of producing existing farm chemicals. For an existing drum of agricultural product with a wholesale price of $500, we estimate an increase in the cost of production of about $0.30. The cost of producing some current products may even go down.

For products currently in development, the cost of production may increase but by small margins.
The increased funding the APVMA may receive through the review of its cost recovery arrangements will strengthen an agvet chemical registration system that already delivers very significant competitive benefits to Australian farmers.

The registration process ensures that chemicals placed on the Australian market work and, if used according to label instructions, do not have adverse impacts on human health, the environment, other crops and animals. Crucially, the process enables Australian farmers to be able to sell their commodities into national and international markets without fear of rejection through residue violations.

A particular feature of the Australian system is the strength of its risk management regime, which allows the wide range of chemical products on the market to be used safely and with confidence.

Service level improvements proposed in the Draft CRIS will enable the APVMA to improve the registration process to increase the flexibility and responsiveness of the system whilst at the same time maintaining regulatory rigour.

Quicker registration times for new products are expected.

Read more about the Review of Cost Recovery.