HAL REVIEW

Horticulture Australia Limited (HAL) is the Research and Development Corporation (RDC) which manages the R&D and Marketing levies collected from growers. The levies payable by producers are determined by a vote of levy payers. Levies are collected by the Levies Revenue Service from horticulture producers as either compulsory or voluntary levies.

Peak Industry Bodies (PIBs) for industries with compulsory levies are formally recognized by the Minister for Agriculture as “Prescribed” Industry Bodies. Prescribed Industries Bodies are A Class members of HAL. The PIBs for industries with voluntary levies are B Class members of HAL. HAL is owned by these members.

The Commonwealth Government has advised that a new Statutory Funding Agreement (SFA) will not be executed with HAL when the current one expires on November 3. There is a perceived (and real) structural conflict of interest in the ownership of Horticulture Australia and the Government wishes to correct this by moving to a levy payer owned Research and Development Corporation for horticulture.

The perceived problem is that the PIBs appoint the Horticulture Australia directors who in turn appoint the Horticulture Australia management who in turn allocate 80% of project funding back to the PIBs as service providers for projects. HAL management also take advice from Industry Advisory Committees which consist predominately of PIB members. Also the Commonwealth Government currently matches R&D levies dollar for dollar but has no direct say in how funds are allocated to projects.
The Board of Horticulture Australia commissioned ACIL Allen to prepare an independent report on levies and HAL in 2013. ACIL Allen delivered the report in May 2014. Their report contained 9 recommendations. These were;

  1. Establish a grower owned RDC (New HAL)
  2. Remove Industry Advisory Committees
  3. Rationalise and strengthen planning
  4. Streamline Industry liaison/RD&E principles
  5. Improve project management and reporting
  6. New HAL services marketing on request
  7. Improve direct grower communication
  8. Greater levy efficiency and transparency
  9. Improved internal accountability/processes

On May 28, the PIBs met with HAL management to discuss the ACIL Allen report and it recommendations. That meeting determined that, given the government will only execute a new SFA with a levy payer owned RDC, the establishment of a vehicle for the transition to a levy payer owned RDC for horticulture should go ahead.
 
This decision was formally ratified on June 20 when an Extraordinary General Meeting of HAL was held in Cairns. A majority of Members formally voted to transition HAL to a grower-owned RDC by passing two resolutions as follows;
 
Resolution 1: “Members of HAL endorse Recommendation 1 of the HAL Review Report, namely: ‘Horticulture Australia Limited (HAL) should over a transition period move to become a grower-owned rural Research and Development Corporation.” Result: 95% IN FAVOUR
Resolution 2: “the Board of HAL be authorised to do all things reasonable or necessary to facilitate Resolution 1 in a timely manner, including selection and establishment of a transition vehicle, in collaboration with Government, by 3 November 2014.” Result: 97% IN FAVOUR
It should be noted that many PIB’s have very serious concerns with some of the other ACIL Allen report recommendations. As a result not all of recommendations 2 to 9 are likely to receive such significant industry endorsement (if any). Many PIBs think that the decision that was ratified in Cairns is a “back to the future” scenario and they fear that the interests of individual commodity grower/level payers could be lost.
There is much that is yet to be determined including the transition process, the ownership of the transition vehicle and agreement by government for this transition process. At the moment there are many more questions than answers.
 

The A, B and C Class members of HAL are;
Almond Board of Australia, Apple and Pear Australia Ltd., Australian Banana Growers Council Inc., Australian Lychee Growers Association, Australian Macadamia Society Ltd., Australian Mango Industry Association Ltd., Australian Mushroom Growers' Association Ltd, Australian Nashi Growers' Association Ltd, Australian Olives Association, Australian Table Grape Association Inc., AUSVEG, Avocados Australia Limited, Cherry Growers Australia Inc., Chestnuts Australia Inc., Citrus Australia, Custard Apples Australia Inc., Dried Fruits Australia Inc., Growcom (as representatives of the pineapple industry), Nursery and Garden Industry Australia, Australian Onion Industry Association Inc, Papaya Australia Ltd., Passionfruit Australia Inc., Persimmons Australia Inc., Potato Processing Association of Australia, Raspberries and Blackberries Australia Inc, Strawberries Australia Inc., Summerfruit Australia Ltd., Turf Producers' Association Ltd, Australian Asparagus Council Inc., Australian Blueberry Growers' Association Inc., Australian Garlic Industry Association Inc., Australian Melon Association Inc., Australian Nut Industry Council Ltd., Australian Processing Tomato Research Council Inc., Australian Walnut Industry Association Inc., Canned Fruits Industry Council of Australia, Flower Association of Queensland Inc., Growcom, Hazelnut Growers of Australia Inc, Pistachio Growers Association Inc., PMA Australia-New Zealand Ltd., Tasmanian Farmers and Graziers Association, Bayer CropScience Pty Ltd and Botanical Resources Australia – Agricultural Services Pty Ltd.