Too Much Red Tape Could Keep Drones Grounded

From spraying pastures to collecting crop data, drones are set to revolutionise Australian agriculture.  However, despite this enormous potential, calls for more regulation threaten to keep drones firmly on the ground.

The application of drones in agriculture alone is estimated to be worth an enormous $32 billion globally.  How can Australian regulators make sure we embrace this revolution?

No one knows the future of drones and how they will be used.  That's why entrepreneurs must be allowed to experiment and test.  But this entrepreneurial process requires a flexible regulatory system.  What's more, business investors will only be attracted to a regulatory environment that is both certain and stable.

Nevertheless, it appears Australia is about to backflip on last year's decision to relax drone regulations.  For farmers this is a worrying sign because the changes had freed them to fly drones under 25kg for use on private land.

Since the announcement, however, there have been increasing calls to reverse the changes and impose more red tape.  Indeed, we now have a senate inquiry and an upcoming safety review.  This regulatory uncertainty threatens the early stage investments necessary for our domestic drone industry to flourish.

Australia must resist the temptation to stifle development based on fear.  There have been no incidents of collisions with manned aircraft in Australia.  And we still have strict rules preventing drones flying over 120m or within 5km of airports.

It's also unclear why privacy concerns cannot be solved using existing legal principles such as harassment and trespass.

Regulators should cut even more red tape on drones.  They should consider reviewing rules restricting autonomous flight and flying drones beyond visual line of sight.  The agricultural drones of tomorrow may be autonomous ones, flying over vast properties, monitoring crop yields and detecting early plant diseases.

Australia is in a prime position to embrace drone technology.  But this will only happen if we encourage entrepreneurship and investment through flexible and certain drone regulations.

As A Rule, Bureaucracy Is Smothering Agriculture

The recently released draft report highlighted the breathtaking array of complex, duplicative and often inconsistent red-tape requirements that hold our agricultural sector back.

Farmers are best suited to farming;  not filling out forms, complying with archaic rules and battling distant regulators.

The Federal Government should heed the commission's calls and cut back on reams of stifling red tape.

The quicker the change, the quicker the benefits will accrue.

In particular, the privatisation of major ports and foreign-flagged vessels will improve efficiency and get transport costs down.

Removing bans on genetically modified crops will give consumers more choice and allow innovation.

Repealing the re-regulation of international sugar marketing will encourage investment in sugar mills and improve competition.

The sheer volume and growth of red tape is out of control.  Unfortunately, tinkering around the edges is no longer enough.  Bold reform is needed to permanently eradicate red-tape.

To do this, the commission should consider how political institutions could be reformed.

The best place to start is with our three-tiered red-tape system.  Many activities across the economy are regulated by local and state governments as well as at the federal level.

This extra regulation provides no extra benefits to the environment or public safety.  It just adds costs.

A basic principle of effective regulation is that it should be developed and implemented by those nearest to the regulated community.  This is where the local knowledge is.

A good example is environmental regulation.  The Commonwealth has responsibility for regulating matters under the Environmental Protection and Biodiversity Conservation Act.

But many requirements under this Act — such as the need for businesses to prepare environmental impact assessments — are also required at the state level.

Let's get rid of this suffocating bureaucracy

Politicians often claim Australia can be "the food bowl of Asia".  Why, then, do they keep wrapping our farmers in red tape?

The Federal Government recently released its yearly score card of changes in the costs of regulation it imposes, the annual red tape reduction report.

A minor $66 million in regulatory savings were listed in the agriculture portfolio throughout 2014-15.

A great divide is opening between the realities of agribusiness and the commands of bureaucrats.

Red tape means farmers must consult tens of thousands of dictates sprawled over hundreds of Acts and instruments.

There are two ways to attack this regulatory problem.

First, by hacking away at the complex body of regulations farmers ­already must obey.  Unfortunately, it takes serious political courage to rouse such a period of deregulation.  An easier mechanism is to stop new regulations before they are made law.

One example of this necessity is the current furore over Queensland's native vegetation laws.

Years of to-ing and fro-ing, a few election promises, and a change of government later, the Queensland Government is once again aiming at tree-clearing laws.

Drawing on populist images of a chain between two bulldozers, these laws, among other things, will remove "relevant purpose" of clearing exceptions for high-value agricultural land.

Tightening vegetation laws will stifle our most productive lands, damage our global competitiveness and erode farmers' already weak property rights.

Bad regulations like these too often slip through the cracks, adding to the underlying stock of regulation.

Red tape is creeping into almost every facet of farm life, draining the productive and entrepreneurial life out of our farmers.

If Australia's $53 billion agriculture industry is going to survive, and indeed flourish, the Government must get out of the way.

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Beef industry needs greater control of money from levies

The Federal Government's proposed Senate inquiry into the collection and disbursement of levies in the beef cattle industry should be seized by producers.

They should take control of the money government takes from them and reform the way it is spent.

Both the Australian Beef Association and the United Stockowners of Australia have long complained about the government-appointed bodies that dictate how farmers' hard-earned cash is spent.

The peak industry body, Cattle Council of Australia, is dominated by councillors appointed by state farm organisations.

They represent fewer than 20 per cent of cattle producers yet set the mandatory levy all cattle growers must pay.

Beyond that, the Meat and Livestock Australia spends the $56 million of levies with inadequate guidance from the cattle growers.  If that was not bad enough, it is not clear that anyone actually knows who is paying the levy.

There is no definitive record of who has paid the tax (or even how much).

The levy is simply collected from the overall cattle yard sales at the end of the day.

By contrast, Australian Wool Innovation offers a fully democratic model for wool growers.

Not only do they directly vote for representatives on the AWI, every three years producers also vote on the rate of the levy, which can be between 0 and 5 per cent.  Recently growers voted for 2 per cent.

The inquiry should also look at the successes other agricultural industries have had in involving the private sector.

The National Grower Register has been used to great effect in the grain market.  Each producer is given their own unique registration number that keeps track of all transactions, deliveries and payments.  The database is universal across Australia.

Any levies are taken directly and there is a record of how much has been paid.

The cattle industry can take both the AWI and NGR's leads to create an industry body that will properly provide for growers' needs.  Cattle growers could create their own company limited by shares, where each share equals a head of cattle.  The more cattle you have, the greater the amount of votes.

This prevents part-time hobby farmers from having greater sway than the producers who have the greatest skin in the game.

To facilitate this, the industry would need a registration database such as the NGR (or even employ them directly to mimic the success they have had in the grain sector) to create a definitive list of the producers, and thus shareholders, of the cattle industry of Australia.

Such a board would be best served by subcontracting out the marketing, research and development to specialised businesses, who will have to tender for the work.

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Science forgotten in green movement

The Federal Government's National Food Plan green paper dismisses agricultural development in northern Australia.  This is a case study in green ideology dressed up as expert advice.

The green paper finds ''large-scale expansion of irrigated agriculture in northern Australia does not appear to be sustainable or feasible''.

The green paper rejects large-scale irrigated agriculture in northern Australia on the explicit authority of a 2009 report by the Northern Australia Land and Water taskforce.

Established by the Howard government in 2007, the taskforce's original terms of reference were to identify ways agriculture could be expanded in northern Australia, including the Gulf Savannah region.  The taskforce recognised that 65 per cent of Australia's runoff occurred in far north Australia and coastal Queensland, indicating water is under-utilised.

With a change of government in November 2007, the NALWT and its mission was changed to reflect the new government's preferences.  Under the Rudd government, members of the green lobby took hold of the taskforce, bringing their anti-development ideology with them.

One member was chosen from the World Wildlife Fund after public statements opposing the intensification of farming in the north.  Prominent members of the Australian Conservation Foundation and Planet Ark were also added, one of whom previously argued ''irrigated horticulture, intensification of beef production, expansion of mineral exploitation and clearing for forestry plantations is not compatible with protecting the most globally important values of the north — nature and culture.''

There's a cynical aphorism in Australian politics that you should never hold an inquiry unless you already know the result.  With new membership, the outlook of the taskforce changed dramatically.  Rather than an investigation of how to increase agricultural output in northern Australia, the final report sought to lock northern Australia into a low-development future, effectively making it one big nature reserve.

The opportunity to show leadership and provide an outline for future growth was lost.  Instead the report was negative, cautious, and emphasised arguments for minimal agricultural development.

In particular, opportunities for water storage through damming had no place in the report.  The taskforce's key scientific source, the CSIRO's Northern Australia Sustainable Yields project, was told not to investigate the feasibility of new dams.

The CSIRO's Richard Cresswell has said ''at the time of the study, all jurisdictions (the West Australian, Queensland and Northern Territory governments) had a no-dams policy, and therefore we did not investigate the opportunities for dams in the north.''

Because these states were Labor at the time of the CSIRO study, Dr Cresswell said ''we weren't asked not to investigate them, but we were told it wasn't necessary to investigate them''.

This goes to the authority of what has been presented as an independent scientific study.  When a major element of irrigation planning is removed from scientific investigation for what seems to be political reasons, the report's findings should be questioned.

Yet despite the NALWT report's flaws, the National Food Plan bases its case against a northern foodbowl on it.

The green paper, following the NALWT report's lead, cites lack of infrastructure in northern Australia as a reason agriculture can't be expanded, ignoring that we are on the verge of major changes in global demand for food that will drive investment in agricultural infrastructure.

According to a 2010 OECD report, by 2020 more than half the world's middle class will be in Asia and Asian consumers will account for more than 40 per cent of middle-class consumption.

There is also an increasingly wealthy Chinese upper class that strongly desires our high-quality goods.  While these countries face the prospect of food stress, Australia is well-placed to take advantage of higher agricultural commodity prices and Asian capital.

At a recent In The Zone business round table attended by Prime Minister Julia Gillard and Perth business leaders, Citic Pacific Mining executive chairman Dongyi Hua highlighted these opportunities.  Hua believes agriculture will drive the Australian economy as the mining construction boom has in recent years.

''Those top people, they never care about the price,'' he said of wealthy Chinese consumers' appetite for Australian beef.

To make the most of these opportunities, the anti-development ideology that has locked up large tracts of northern Australia must end so that we can overcome our irrational aversion to building new dams.

Are STD rates being milked?

The Federal Government's universal service obligation is designed to ensure all Australians have access to standard telephone services and payphones.

For country people, the USO ensures everyone can receive a basic telephone service installed at a reasonable cost.

Without the USO, the cost of installing a phone line would be way beyond the realms of possibility for most rural and remote Australians.

At the moment the USO is paid for by the telephone companies, in proportion to their market share across urban and rural Australia.

Each company's contribution is put into the USO funding pool, which is then used by Telstra to maintain and connect rural and remote networks.

But there's a problem.

To start with, the last time the regulator calculated the cost of providing the USO, it came up with $550 million.  That was in 1997.

Back then petrol cost 73 cents a litre and wages were 30 per cent lower than now.

Yet for next year the Government has set the cost of the USO at $157 million.

This is bizarre, because in 2007 installation and maintenance costs to provide telecommunications services to remote users are sure to be higher than a decade ago.

On the Government regulator's own figures, there will be at least a $400 million shortfall on the USO next year.

That's the difference between what the USO costs to provide and what is collected from phone companies.

That means Telstra has to find the shortfall.

Services to rural Australia are still being delivered by Telstra because this is a condition of its licence, even though it is not fully funded to do so.

Someone must be paying the difference between what the Government sets as the figure telecommunications companies pay for the USO and what it actually costs.

The most likely group is the very one set up to benefit from the USO -- rural and remote Australians.

Would we be surprised if rural, regional and remote telephone users are paying higher STD call charges to cover the shortfall in USO funding?

There are three groups of phone users that could be bearing the cost of paying for the USO shortfall -- city consumers, business, or country consumers.

It is unlikely that Telstra is able to extract the shortfall from its business markets, which are highly competitive.

The same applies to Telstra's residential market in major cities.

By contrast, although there is significant competition in rural areas, (we all suffer from those dreadful telemarketing calls on bad lines from phone companies nobody has ever heard of), by international standards STD and mobile phone charges remain high for many country users.

There is no way of proving whether the reason we have so many STD areas and such high STD costs is to make up for the shortfall in USO funding.

After all, in the US it costs as little as two cents a minute to make a call from one side of the country to the other.  But the lowest price in Australia is many times that amount, unless the service is bundled with other products.

And it is not as if distance is any longer the reason for higher charges.

In Queensland, business and government customers can sign up for a flat rate of 10 cents a call to anywhere in the state.

Similarly, the distance from one side of Melbourne to the other is much further than across most STD zones in country Victoria.  Yet all Melburnians enjoy local calls to the other 3.5 million in their city.

The remaining 1.3 million Victorians, living in country areas, must pay STD rates, sometimes just to the next town.

A great deal more transparency is needed to ensure that the figure the Government sets as the cost of the USO is as close as possible to its real cost.

Then all of us, country people, phone companies, the Government and urban people, can have an informed conversation about how much we value everybody in this nation having access to telecommunications.

Only then can country people be sure that they are not subsidising the connection and maintenance of new rural and remote customers by paying higher STD charges than necessary.