Guidelines

Guidelines for The Allocation of Non-Standard Quota Entitlement for 2011-2012 Export Quota

Background

1. On 10 November 2005 the Hon Peter McGauran, the then Minister for Agriculture, Fisheries and Foresty, agreed to revised arrangemetns to apply from the 2006-07 quota year for the allocation of Australia's 7,000 tonne quota for high quality beef (HQB) exports to the European Union (EU). This followed a review by an independent beef quota review panel involving an extensive industry consultation process to determine the most equitable basis for the allocation of EU HQB quota to potential quota holders. The access amount has since been increased to 7,150 tonnes under revised European Commission (EC) regulations (Commission Regulation (EC) No. 408/2006).
2. The primary aim of the revised arrangements is to ensure maximum use of the quota and through this provide the greatest benefit to Australia. This is achieved by placing quota in the hands of beef exporters that support the EU market and ensuring any quota premiums are available to Australia to maintain producer, processor and exporter commitment to this valuable market.
3. The main characteristics of the revised quota system are:
   From the quota year commencing 1 July 2006, standard quota is to be allocated to licensed meat exporters on the basis of all recorded shippments into the EU HQB market (both in-quota and out-of-quota) during the previous shipping year. 
   
   
   The minimum quota allocation is 1 tonne.
   
   Standard quota may be traded.
   
   
   Quota remaining uncommitted towards the end of the quota year will be available to all licensed exporters.
   
   
   • An amount of up to 500 tonnes, known as non-standard quota entitlement, has been set-aside from the 7,150 tonne access amount for distribution to new entrants and to existing quota holders whose allocation in 2006-2007 was less than 150 tonnes, provided they have not held an allocation in excess of 150 tonnes in any of the last 6 quota years.
     
   • Quota allocated to new entrants will not be transferable to other exporters.
     
   • Any non-standard quota entitlement not allocated in the initial process will be distributed on a pro rata basis to standard quota holders up to the amount of which that exporter applied.

   Purpose of these Guidelines

4. The purpose of the Guidelines for the Allocation of Non-Standard Quota Entitlement 2011-2012 (the guidelines) is to outline the administative arrangements for the management of non-standard quota entitlement under the EU HQB quota for 2011-2012. The guidelines have been developed in consultation with the Australian Meat Industry Council (AMIC).

   Non-standard EU Quota Entitlement

5. Exporters applying for non-standard quota entitlement will need to satisfy the Secretary of the Department of Agriculture, Fisheries and Forestry (the Department) that their intentions to supply the EU market with HQB have a sound basis.
6. For 2011-2012, new applicants for quota entitlement must be licensed meat exporters that are independent of any other company that has received EU HQB quota in excess of 150 tonnes in any of the last 6 quota years.
7. Applicants may apply annually for non-standard quota:
   •  for a period of 6 years from the date of the first application;or
     
   • until a cumulative non-standard allocation of 150 tonnes is reached over the application period; or
     
   • until combined standard and non-standard quota obtained in any year reaches 150 tonnes or more.
     
8. Additionally, licensed meat exporters allocated less than 150 tonnes at the commencement of the 2005-2006 quota year and who have not held an allocation in excess of 150 tonnes in any of the last 6 year may apply annually for non-standard quota commencing from the 2010-2011 quota year with applications terminating in the 2011-2012 quota year. Eligibility will:
   • be for the difference between their 2010-2011 allocation and 150 tonnes;
     
   • ceased when the cumulative allocation of non-standard quota obtained in any year reaches 150 tonnes or more.
     
   • apply until the combined standard and non-standard quota obtained in any year reaches 150 tonnes or more.

   Application for Non-Standard Quota Entitlement

9. All Application need to be considered relative to each other but, as a guide, the Secretary will seek to identify:
   • comprehensive information in the application, such as the existence of contracts, agreemetns to supply the EU market
     
   • the quailty of the applicant's risk management approach in pursuing EU HQB market opportunities, eg. whether the applicant sought other export market opportunities
     
   • the ability and capacity of the applicant to maintain export business into the future
     
   • a demonstration by the applicant that it is bringing in new export business, not replacing others' business
     
   • usual good commercial practice in the beef export industry as may be relevant to the circumstances of the applicant.
     
10. It should be noted that the purpose of the arrangements is to assist potential new market entrants to supply HQB on an ongoing basis to the EU market. In making assessments of the applicants for non-standard quota entitlement under this category the Secretary may have regard to the extent to which each applicant has:
    • enhanced industry performance or capability, eg. additional regional spread of capability
      
    • built demand for HQB and other beef products in the EU, eg. sales of "out-of-quota" product;
      
    • developed additional niche markets;
      
    • encouraged development of through-chain allianceds, e.g. identified EU accredited producers and processors from which the applicant will source the HQB destined for the EU market.

    Basis of Allocation to Approve New Entrants

11. Applicants approved by the Secretary for an allocation of non-standard quota will receive an amount which is lesser of:
    • the quantity expressly applied for (up to a maximum of 150 tonnes); or
      
    • an amount resulting from the equal division of 500 tonnes by the number of non-standard quota recipients; or
      
    • in execptional circumstances (ie. existence of "excess quota applicants"), an amount resulting from application of the steps outlined in Section 9 of the Australian Meat and Live-stock Industry (High Quality Beef Export to the European Union ) Order 2011.
      
12. An allocation of non-standard quota is not transferable to another exporter during the 2011-2012 quota year and, if not committed for use by 2 March 2012, will be reassigned to the uncommitted amount and will be available to other exporters seeking to utilise additional quota.
13. Standard quota held by a recipient of non-standard quota may be transferred by the quota holder to another exporter but any quota so transferred will be deducted from the exporter's eligable limit of 150 tonnes.
14. Any part of the 500 tonnes of non-standard quota not allocated by the Secretary in the initial process will be distributed on a pro rata basis among those recipients of standard quota that received more than 150 tonnes of quota in 2011-2012. This allocation will be subject to the recall date (2 March 2012) for unused quota. After that date, any remaining standard or non-standard quota held by eligible exporters will be returned to the uncommitted quota pool and distributed according to the provisions for uncommitted quota.

    How to apply for Non-standard EU Quota Entitlement

15. The department will provide a notice seeking applications from exporters for an allocation of non-standard quota entitlement.
16. The following timeframes are expected to apply:

    The notice will be issued to all beef exporters before 1 April 2011 seeking applications for allocation of non-standard qutoa entitlement and outlining the process for making application for the grant of such entitlement
    
    - the application should address, but is not limited to, the factors outlined in these guidelines. Applications for non-standard entitlement close on 29 April 2011.

    • Applicants will be advised of the Secretary's decision by 30 May 2011.
      
    • Any non-standard entitlement no allocated will be distributed to standard quota holders as described above.

    Further Information

17. Requests for further information should be directed to:

Quota Administration Unit
Livestock Industries & Animal Welfare
Department of Agriculture, Fisheries and Forestry
GPO Box 858 Canberra ACT 2601

Fax: (02) 62724585

E-mail: Quota Admin