Grain Producers Australia is aware that auditing of growers has recently commenced, to investigate the accuracy of recent End Point Royalty (EPR) declarations.
GPA has held ongoing engagement with Australian Crop Breeders (ACB) regarding the role of EPRs in supporting growers, to help deliver a more profitable and sustainable grains industry.
This engagement includes reinforcing GPA’s policy position that the system of collecting EPRs needs improvement to ensure it is more streamlined, cost-effective and user-friendly for growers.
ACB have acknowledged that the Annual Harvest Declaration process is cumbersome and a frustration point for growers. They’ve committed to reviewing the Harvest Declaration system, with the aim developing a more simplified and grower friendly tool. GPA will continue working with ABC to ensure any changes meet the needs and expectations of growers, to improve efficiencies.
GPA also supports changes that help plant breeders to receive a fair and equitable return through EPRs for their breeding of new varieties for the benefit of the Australian grains industry.
In response to the commencement of grower audits last week, GPA immediately sought information from ACB to clarify key questions regarding these processes that have now been initiated by some of their members, to assess the accuracy of reporting and improve EPR compliance.
Growers are being asked to provide information relating to their 2020 and 2021 crops – other information is provided in the FAQ’s below.
Any further queries or concerns with these matters can be directed to GPA directly and/or state farming representative groups HERE
RESPONSES TO GPA QUESTIONS FROM AUSTRALIAN CROP BREEDERS
Q: What sort of information can/will be requested of growers?
A: Agriculture and Environment Australia have been contracted by four plant breeding companies to conduct audits. Growers will be asked to provide information relating to their 2020 and 2021 crops. This may include:
· EPR records
· Tonnes harvested by variety
· Tonnes retained for seed
· Tonnes stored on farm
· Tonnes used on farm (i.e. for stock feed)
· Tonnes warehoused (off farm)
· Buyers of all sold grain and respective tonnages.
· Harvest declaration forms, bulk handler reports and grain trader reports, provided by the Royalty Collector
· Farm map(s)
· Verification information:
· Written authority to contact your Agronomist and grant access to agronomic records, such as through Agworld, BackPaddock, Phoenix, etc
· Your agronomist’s contact details
· Full planting records
· Harvest records
· Grain samples
Q: Are the audits legally binding – and how does this relate/connect to the legal agreement on seed labels?
A: Yes, as per the terms of seed variety licence. If growers have made a genuine mistake, we will work with them to rectify and bring their EPR obligation up to date. Where growers are found to have deliberately mis-declared the EPR obligation, or they don’t wish to cooperate with the Audit process, the relevant breeding company will look to enforce its legal rights in accordance with the Grower Variety Licence. While there are serious penalties for non-compliance, these will be applied as a last resort. We want to see all growers fulfill their obligations and comply according to their requirement under the PBR Act.
Q: How does the audit process work ie do they visit the farm for half a day and go through the books/paddocks/sheds etc?
A: Growers will be contacted by Agriculture and Environment Australia. Yes, it will involve an on-farm visit to collect the information outlined above.
Q: Is there an audit fee, is this placed on the growers?
A: The cost of audit will be as outlined in the variety licence. Extract from the licence:
'If an audit is conducted and the audit report indicates that You have underpaid, under-estimated or under-calculated any amount due as EPRs by more than (5%) You may be required to: 1. pay all audit fees (on an indemnity basis); 2. pay the full amount of any shortfall (inclusive of any GST or other taxes owing on such amount); and 3. pay interest on the amount of EPR owing at the rate outlined in Schedule 2 Item 3. Interest will be charged from the 1st of April in the year the EPR’s owing were normally required to be paid. 8.2. If any audit shows that you have overpaid us by more than 5% we will credit the overpayment against future payments.'
Q: How do you determine which growers are being targeted for the audits and why/where?
A: Breeding companies have previously checked and followed up growers on an individual basis for inaccurate or missing EPR payments. The current program is a sector-wide formalisation of these activities, with several ACB breeder Members actively and independently auditing growers they suspect of benefiting without contributing.
Q: What are the likely infringement penalties – ie is there a criminal charge, does the grower need to re-pay any underpayment etc?
A: If the audit shows non-compliance then the grower will need to work with the individual breeding companies on a resolution. It is anticipated that this will involve paying any amounts owed.