Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017

Administered by Department of Agriculture

Legislation au F2017L00308 Regulations Not in force Legislative Instrument

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Explanatory Statement

 

 

Issued by Authority of the Deputy Prime Minister and Minister for Agriculture and Water Resources

 

Primary Industries Research and Development Act 1989

 

Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017

 

Legislative Authority

 

The Primary Industries Research and Development Act 1989 (the Act) authorises the undertaking of Research and Development (R&D) relating to primary industries and natural resources and for related purposes. Section 149 of the Act provides that the Governor-General may make regulations not inconsistent with the Act, prescribing matters required or permitted by this Act to be prescribed; or necessary or convenient to be prescribed for carrying out or giving effect to the Act.

 

Purpose

 

The purpose of the Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017 (the proposed Regulations) is to amend the Cotton Research and Development Corporation Regulations 1990 (the Regulations) by attaching levies to the Cotton Research and Development Corporation (CRDC). For the purposes of the proposed Regulations, the attached levies will be the research component of the levy imposed on leviable cotton as described by the Act and the research component of the levies and charges imposed on seed cotton as prescribed in the Primary Industries (Excise) Levies Regulations 1999 and the Primary Industries (Customs) Charges Regulations 2000. Attaching a levy to the CDRC enables the R&D component of the levy to be paid to the CRDC and used for R&D purposes.

 

Background

 

The cotton industry’s R&D, plant health and Emergency Plant Pest Response (EPPR) activities are funded by excise levies imposed on producers of cotton lint. The current excise levy imposed by the Primary Industries (Excise) Levies Act 1999 is paid against the ‘natural fibrous hairs that are produced from seed cotton by separating the hairs from the seeds and not further processing those hairs’.

 

Exports of seed cotton, which by definition have not undergone processing to remove the fibrous hairs from the seeds at the time of export, do not attract this levy, thus creating an anomaly. Exports of seed cotton have recently become economically viable, meaning that this anomaly did not exist when the current excise levy was first imposed. Amendments through the Primary Industries (Customs) Charges Amendment (Seed Cotton) Regulations 2017 and Primary Industries (Excise) Levies Amendment (Seed Cotton) Regulations 2017 will resolve this anomaly.

 

Impact and Effect

 

The proposed Regulations will attach the levies imposed by the Primary Industries (Customs) Charges Amendment (Seed Cotton) Regulation 2016 and Primary Industries (Excise) Levies Amendment (Seed Cotton) Regulation 2016 to the CRDC. The proposed Regulations will identify the attached levies as allocated wholly towards the research component of the seed cotton levies. Under the Primary Industries Research and Development Act 1989, eligible cotton R&D expenditure is matched dollar for dollar by the Australian Government up to a cap of 0.5 per cent of the gross value of production. This cap will apply to matching of expenditure derived from the export of seed cotton.

 

The proposed amendments to the Regulations will prevent the undermining of the cotton industry’s research systems by ensuring all cotton producers contribute proportionately to the statutory levy scheme regardless of where primary processing (ginning) occurs. There will be no net change to the amount of levy paid by producers against the total amount of cotton they produce, or the government matching contribution paid for R&D. The proposed Regulations will also enable the maintenance of cotton research programmes. The proposed Regulations will likely have a minimal regulatory burden on cotton producers who may be required to lodge a return within 28 days after the end of the month in which seed cotton is exported, and maintain records on seed cotton harvested, bought, sold or exported to validate their return.

 

Consultation

 

The Department of Agriculture and Water Resources (the department) liaised with Cotton Australia, Cotton Research and Development Corporation and the Office of Best Practice Regulation (OBPR) in developing the seed cotton levies. Cotton Australia, which is the peak representative body for the cotton supply chain, consulted closely with its members (including all ginners, cotton co-operatives, consultants and grower associations), and obtained unanimous support to implement a levy on cotton that is exported as seed cotton, at a rate equivalent to the existing levy on cotton lint. The department also consulted the company that indicated plans to export seed cotton and found it was satisfied with the department’s proposed approach.

 

The department consulted OBPR to determine whether a Regulation Impact Statement (RIS) was required for the seed cotton levy amendment proposal. OBPR assessed the proposal to have minor regulatory impact, and determined a RIS was unnecessary at this time (Ref: OBPR ID 21237).

 

Details

 

Details of the Regulations are set out in the Attachment A.

 

The Regulations is compatible with the human rights and freedoms recognised or declared under section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. A full statement of compatibility is set out in Attachment B.

 

The Regulations is a legislative instrument for the purposes of the Legislation Act 2003.


Attachment A

 

Details of the Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017

 

Section 1 – Name

 

This section provides that the name of the proposed Regulations the Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017.

 

Section 2 – Commencement

 

This section provides for the proposed Regulations to commence the day after the instrument is registered.

 

Section 3 – Authority

 

This section provides that the proposed Regulations is made under the Primary Industries Research and Development Act 1989.

 

Section 4 – Schedules

 

This section provides for the Cotton Research and Development Corporation Regulations 1990 is amended as set out in the applicable items in Schedule 1.

 

Schedule 1 – Amendments

 

Item 1 amends the definition of ‘Act’ in Regulation 3 to omit ‘and Energy’.

 

Item 2 repeals Regulation 5 relating to levies attached to the CRDC.

 

Subregulation 5(1) attaches to the CRDC the levy imposed on leviable cotton and seed cotton by the Primary Industries (Excise) Levies Act 1999,the levy imposed on seed cotton by the Primary Industries (Excise) Levies Regulations 1999  and the charge imposed on seed cotton by the Primary Industries (Customs) Charges Regulations 2000.

 

Subregulation 5(2) provides that for the purposes of paragraph 5(3)(a) of the Act, the levies mentioned in Subregulation 5(1) will be declared as research components of the levies.

 

Subregulation 5(3) provides that for the purposes of paragraph 5(3)(b) of the Act, the cotton industry will  be declared to be the primary industry to which the levies relate.


 

Attachment B

 

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017

 

This Legislative Instrument is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Legislative Instrument

The purpose of the Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017 is to amend the Cotton Research and Development Corporation Regulations 1990 by attaching certain levies relating to leviable cotton and seed cotton to the Cotton Research and Development Corporation. For the purposes of the proposed Regulations, the attached levies will be the levy imposed on leviable cotton as described by the Act and the levies and charges imposed on seed cotton as described in the Primary Industries (Excise) Levies Regulations 1999 and the Primary Industries (Customs) Charges Regulations 2000.

 

Human rights implications

This Legislative Instrument does not engage any of the applicable rights or freedoms.

 

Conclusion

This Legislative Instrument is compatible with human rights as it does not raise any human rights issues.

 

 

 

The Hon. Barnaby Joyce MP

Deputy Prime Minister and Minister for Agriculture and Water Resources

 

 

 

 

Overview

The Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017 were enacted to address an anomaly in the funding of research and development (R&D) in the Australian cotton industry. This legislation was introduced by the Deputy Prime Minister and Minister for Agriculture and Water Resources under the authority of the Primary Industries Research and Development Act 1989. The anomaly stemmed from the fact that exports of seed cotton, which are defined as cotton that has not undergone processing to separate the fibrous hairs from the seeds, were not subject to the excise levy imposed on cotton lint, leading to an uneven contribution to R&D funding among cotton producers. The purpose of the proposed Regulations was to ensure that all cotton producers, regardless of where the primary processing occurs, contribute proportionately to the statutory levy scheme. This was achieved by attaching the relevant levies to the Cotton Research and Development Corporation, ensuring that the R&D component of these levies is used for cotton industry research purposes. The Regulations also ensured that the Australian Government's matching contribution for cotton R&D would remain unchanged, and that the total levy paid by producers would not be affected.

Scope and Application

The Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017 applies to the Cotton Research and Development Corporation (CRDC) and its associated levies concerning the cotton industry in Australia. This legislation amends the Cotton Research and Development Corporation Regulations 1990 by attaching levies to the CRDC for the purpose of funding research and development activities in the cotton industry. Specifically, the Regulations attach the research component of the levy imposed on leviable cotton, as described by the Primary Industries Research and Development Act 1989, and the research component of the levies and charges imposed on seed cotton as prescribed in the Primary Industries (Excise) Levies Regulations 1999 and the Primary Industries (Customs) Charges Regulations 2000. The purpose of these amendments is to ensure that all cotton producers contribute proportionately to the statutory levy scheme, regardless of where primary processing occurs, thus preventing the undermining of the cotton industry’s research systems. The Regulations have a national reach, affecting all entities involved in the production and export of cotton in Australia. There are no stated exclusions, exemptions, or thresholds in the Regulations, although the impact on cotton producers is expected to be minimal, with potential obligations to lodge returns and maintain records relating to seed cotton exports. The Regulations come into effect the day after they are registered and are compatible with human rights as they do not engage any applicable rights or freedoms.

Key Provisions

The main operative sections of the Cotton Research and Development Corporation Amendment (Seed Cotton) Regulations 2017 (the proposed Regulations) include Section 4 which amends the Cotton Research and Development Corporation Regulations 1990 (the Regulations). Specifically, Item 2 in Schedule 1 repeals Regulation 5, which previously dealt with levies attached to the Cotton Research and Development Corporation (CRDC). In its place, Subregulation 5(1) attaches to the CRDC the levy imposed on leviable cotton and seed cotton by the Primary Industries (Excise) Levies Act 1999, the levy imposed on seed cotton by the Primary Industries (Excise) Levies Regulations 1999, and the charge imposed on seed cotton by the Primary Industries (Customs) Charges Regulations 2000. These levies will be declared as research components of the levies for the purposes of the Primary Industries Research and Development Act 1989 (the Act). The obligations and requirements imposed by the Act on the parties it governs include the obligation for cotton producers to contribute proportionately to the statutory levy scheme regardless of where primary processing (ginning) occurs. This is achieved by attaching the levies to the CRDC, ensuring that all cotton producers contribute to the research component of the levy, which funds research and development (R&D) activities. The Act also requires the CRDC to use the attached levies for R&D purposes. Additionally, the Regulations impose a requirement on cotton producers to maintain records on seed cotton harvested, bought, sold, or exported to validate their returns when lodging a return within 28 days after the end of the month in which seed cotton is exported. The proposed Regulations introduce offences, penalties, or civil/criminal consequences for non-compliance. The primary consequence of non-compliance would be the failure to contribute proportionately to the statutory levy scheme, thereby undermining the cotton industry’s research systems. While the explanatory statement does not specify maximum penalties for breaches, non-compliance with statutory obligations under the Primary Industries Research and Development Act 1989 and related legislation could potentially lead to civil or administrative penalties, depending on the nature and severity of the breach. The regulatory burden on cotton producers is expected to be minimal, primarily involving the need to maintain records and lodge returns as required.

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Sourced from the Federal Register of Legislation at 26 August 2026. For the latest information on Australian Government law please go to https://www.legislation.gov.au.