Industry Levies

The Seals Levy

The first ‘levy’ on any sort of beekeeping activities came in the late 1930s with the commencement of the Seals Levy.  Descriptions of its purpose varied in its more than 30 year existence, from being purely for advertising initially, to being a stabilisation/equalisation fund between local realisations and export returns in its later years.

Physically, the Seal Levy was a gummed stamp that the beekeeper affixed to the honey container.  In later years, the ‘seal’ was printed onto the honey container itself, with the container makers collecting the levy on behalf of the marketing body.

The Seals Levy was payable on retail sales of honey that was not being supplied to the marketing body of the time – first the Internal Marketing Division (IMD) and from 1954-1970 the Honey Marketing Authority (HMA).  There were exceptions.  Honey sold at the beekeeper’s premises was exempt from the levy, generally up to the 60lb. container level.

The overall concept was that the Seals Levy could be used to ensure enough honey was exported so that a glut of production would not lead to price cutting and reduction in returns to the beekeeper.  It was used, effectively, to subsidise the export of honey.

Avoidance and Resentment of the Seals Levy

There were claims of levy avoidance.  Honey sold ‘at the gate’ and honey packed for a local market accounted for a large percentage of NZ consumers, in these pre-supermarket days, a much greater percentage than now.  Some beekeepers, it was said, would collude with a local grocery to sell them honey upon which the levy had not been paid.  That small margin, combined with the economies of a local market, allowed those beekeepers to compete effectively.  The beekeeper and the grocer could split the small amount between them.

There was a natural resentment about the Seals Levy, particularly when the marketing body (both IMD and HMA were responsible) would sell particularly into the rural grocery markets.  Producers, producer/packers and packers were fine with paying the Seals Levy, so long as it was used to subsidise the export of honey.  Exported honey was a good thing all around.  It kept the local market prices stable and reduced the price-cutting that a large crop could precipitate.  The IMD, then the HMA, were seen to be operating best for the NZ beekeepers if they exported at the best price possible, using the subsidy of the Seals Levy, and ensured honey supplies to the main population centres.  It was felt that individual beekeepers, scattered across the country as they are, could best service honey sales to rural NZ.  To find the HMA, for instance, selling in competition with a local honey producer/packer in the beekeeper’s own area, and able to legally undercut through the use of the Seals Levy collected from the local beekeeper – that did lead to a lot of ill feeling at times.

The Seals Levy was also used to provide the National Beekeepers’ Assn (NBA) with a grant to acknowledge its critical role in industry stability, though the process was sometimes flawed.  Going back to the formation of the HMA in 1954, there was a massive beekeeper outcry when the grant to the NBA ‘shall’ be paid being changed to ‘may’…

A Hive Levy Collected by the Honey Marketing Authority

In the early 1970s, when the realisations for export sales began to exceed the prices available on the local market (government-controlled as they were), the industry clearly wanted to move away from the Seals Levy,  NBA President Ivan Dickinson proposed to the Minister that the levy should be retained – but that it should be collected on all sales of honey.  At the same time, there would be an ‘NBA membership’ fee based on a rate ‘per 100 hives’.  Both of these would require Ministerial/Government actions.

When change came, in 1975, the Minister was not inclined to do away with the Seals Levy entirely.  Nor was the NBA given its own hive levy, or at least not yet.  The Minister still wanted the facility to be able to raise money to stabilise/equalise the NZ honey market, should the export market not be so lucrative as it was at the time.  So the Seals Levy itself was revoked, but in its place was put a hive levy.

The levy was collected by the HMA, but with the proceeds to primarily benefit the NBA.  The levy rate came from recommendation by both HMA and NBA to the Minister.  The regulations retained the ability for both NBA and HMA to recommend up to an additional 5 cents per hive that would go into a stabilisation fund for the HMA’s use when export returns were not so buoyant as then.

This first attempt at a hive levy referred to the levy as payable on each hive, defining it as  ‘… an artificial hive containing a colony of bees used or suitable for use in the production of honey.’  The levy payable by all beekeepers with more than 50 hives.

A Hive Levy Collected by the National Beekeepers’ Assn

The original hive levy was part of the Honey Marketing Authority Regulations 1975.  It was only a few years before the issues began to appear.  The HMA was not very keen on collecting the new levy ‘on behalf of’ the NBA.  Nor was the NBA especially happy with the situation, with what some saw as a continued dependence on the HMA.  Ivan Dickinson’s original plan for a hive-based levy was to have been the NBA collecting a levy for itself.

The Hive Levy Act 1978 basically left the NBA to collect the levy.  The HMA was still involved to make recommendations to the Minister about the levy rate, and the provisions for creating a stabilisation fund remained as before.  But by 1978, the HMA was facing dramatic change, with people seen as ‘opposed’ to the HMA being elected to the authority.

Issues When Collecting the Hive Levy

The 1978 Act also introduced a definition for ‘a beekeeper’, being ‘any person who carries on business as a producer of honey for sale and who keeps a total of 50 or more hives.’  In future years, there were numerous creative challenges to avoid the levy by new interpretations and constructions of both ‘hive’ and ‘beekeeper’.

Issues from queen breeders are an obvious example.  Should each queen rearing nucleus attract the hive levy?  Or the newly emerging pollination beekeepers – are they truly ‘beekeepers’ under the Hive Levy Act if they only incidentally produce an occasional crop of honey, while their real business activity is not ‘as a producer of honey for sale’.

The basic principles of the Hive Levy Act – levy collected by the NBA and for the NBA, on 50 hives or more, based on a declaration by the beekeeper – were in force for just over 20 years, from the middle 1970s to the middle 1990s.

At least until the Privacy Act 1993 restricted access to the apiary register, the NBA was able to work closely with the Ministry of Agriculture (MAF) to compare numbers when there were questions.  Though not always entirely accurate, MAF maintained the apiary register through the powers of the Apiaries Act 1969, and figures for hive numbers were generally pretty close.  The NBA had only to contact the chief Apicultural Advisor Officer at MAF and the hives for levy could be easily compared to the hives as determined by MAF.  Obviously, all of that changed in the early 1990s…

But even then, the NBA’s voting system and rules provided for a positive influence in hive levy declarations.  At least for beekeepers with less than 1200 hives, voting strength related directly to hive holdings.  Prior to the remits meetings held by branches, generally in June, the NBA would send to branches the membership and their voting strengths.  Beekeepers with more than 1200 hives could, potentially, declare fewer hives for levying purposes without their voting (the maximum of 12 votes) giving away the deception.

As well, difficulties arose in the ‘establishment of a debt’.  As the hive levy was collected on an annual declaration by the beekeeper, collecting the levy was sometimes frustrating and ineffective.  If the beekeeper refused to submit such a declaration, or (more often) simply under-recorded the number of hives, the NBA did not really have an ‘established debit’ to collect.  Unable to simply turn the debt over for collection, the NBA was obliged to use the court process in order to in some way establish the debt.  

Which then brought in the question of the declaration of hives numbers as at a specific date in the year, the ‘calculation date’ being set as 1 January.  The NBA had no real ‘smoking gun’ to show the court.  Good evidence would be someone who visited a particular apiary, and found the hive numbers different than reported.  But the beekeeper might well say that those hives had been moved to other apiaries before that date, and the change had not yet been registered with MAF.  So if the beekeeper was obstructive and non-compliant, the ‘evidence’ that the NBA really needed might be something like someone literally counting the hives on the declaration date.

Beekeepers sometimes used arguments related to ownership (transferring hives in lots of 50 to other family members), bad seasons (‘Yes, it was a terrible summer, and I lost most of my hives before Christmas.  Fortunately I’ve been able to increase the numbers in the autumn.’) and being a beekeeper (‘I’m not really in the business of producing honey for sale…’)

When facing a court environment, the costs of collection to the NBA were generally seen as liable to exceed the collected amount.  At times the NBA simply could not collect the hive levy in a cost effective manner.

An Apiary Levy Using the Commodity Levies Act

The idea of using apiary numbers, rather than hive numbers, as the basis for a levy came out of the NBA’s strategic planning, leading to an Industry Plan.  MAF had made it clear that the beekeeping industry would need to, in some way, pay for the AFB inspection services previously paid for by the Government.  It was even willing to facilitate the development of industry levying systems, with the outcome being the Commodity Levies Act 1990.

That Act was quite unworkable initially, with an requirement that more than half of the owners, representing more than half of the commodity actually vote in favour.  To even expect 50% of the people to be levied to actually bother to take part in a ballot?  It wasn’t until re-interpretations reduced that requirement to 50% of those actually taking part in the ballot. 

By 1990 the NBA had settled on the wish for an apiary-number based levy, and referred to the intent in the 1990 Industry Plan.  It was felt that beekeepers, overall, were more ‘honest’ in registering apiaries than ensuring that the hive numbers on each were correct.

The NBA expressed it sometimes as a fair, simple, and practical collection means.  In one sense, the levy was not even really on apiary numbers; it was on the number of apiaries that appeared on the apiary register for that beekeeper on the declaration date.  It was seen as an objective basis for collection of the levy, and would require less rigor in establishing a debt in a court context.

MAF, in managing aspects of the Commodity Levies Act, was not very supportive of the move from ‘hives’ to ‘apiaries’, even though it was the clear expression of the beekeeping industry at the time.  MAF would have preferred a straight ‘roll-over’ of those aspects of the Hive Levy Act, with the NBA continuing a levy based on hive numbers.  MAF contended that ‘apiary numbers’ were not an appropriate basis for a levy.  Apiary numbers were not ‘…a thing or things of a specified kind connected with the production of a commodity’.

Faced with the industry’s determination, MAF ultimately amended the Commodity Levies Act to allow for an apiary-based levy in 1995.  Following a ballot for support, the NBA achieved a levy with just over 70% support (by beekeeper and apiary numbers).  MAF sent out the voting papers on behalf of the NBA, as there was no right to access until the NBA achieved a PMS, which did require access to the register.

The Pest Management Strategy had to be paid for as well, and MAF would have preferred for the NBA to use the levy facilities in the Biosecurity Act.  Such a levy would have been at the Minister’s discretion, and would not require a ballot for support as with Commodity Levies.  But it would have brought in another layer of required compliance/overhead to the NBA.

NBA Loses Its Levy Through Inadequate Support

As the time period for the industry’s single levy (administration, disease control and marketing) came close to expiry, the NBA approached the concept of levying somewhat differently.  In 2002 it proposed a two part Biosecurity Act levy (a fixed amount for each beekeeper, and a certain amount per hive) and a separate per hive levy using the Commodity Levies Act.  There was an expression that since all beekeepers benefit from disease control measures, that they should each be levied.  

In reporting the results of the levy (relating only to the ‘NBA’ levy, not the PMS levies, the NBA (incorrectly) reported that the ballot failed as less than 50% of levy payers had voted.  That was not correct, as the basis for success would be more than 50% who cast ballots.  But regardless, the NBA lost the support for a Commodity Levy,  

Although 55% of voters favoured the levy, those beekeepers owned only 45% of the hives represented in the ballot.  To be successful both would need to be more than 50%…

To compound the problems, the Minister deemed that the consultation relating to the two Biosecurity Act levies had not been adequate, and so was unwilling to provide the levy for the PMS (only) that the NBA sought.  

Biosecurity Act Levies for the Pest Management Strategy

Ultimately, the Minister agreed to a new BSA levy, but basing its details mostly on what had previously been the original commodity levy provisions, but extending its coverage.  That is, there was a ‘per beekeeper’ component of the levy, and a ‘per apiary’ component.  The Minister established the levy on all beekeepers, and the ‘per apiary’ rate, payable on all apiaries.

With the loss of the NBA’s own levy, and its reliance on voluntary support and funding, the PMS was in a delicate position.  There were times when the NBA may well have played a bit fast and loose, utilising money raised for the PMS to fund what should have been NBA activities.  Even before the levy’s demise, the NBA had deemed that the difference between the two rates – the ‘per beekeeper’ and the ‘per apiary’ rates – should be directly credited to the NBA’s publications income without further ado.

Apiculture NZ (ApiNZ) Replaces the NBA

The PMS, now named a Pest Management Plan (PMP), continued to function through the new decade.  While the Minister retained the NBA as the Management Agency, there was disquiet that other aspects of the industry did not have direct involvement.  The Bee Industry Group (BIG) of Federated Farmers agreed to representation.  

In 2016, the NBA, BIG, the NZ Packers and Exporters Assn and a range of hobbyist clubs joined to form Apiculture NZ.  The levy regulations, apart from the references to the NBA as ‘Management Agency’, remained as they were previously.

A Second Failed Attempt at a Commodity Levy

Once the new organisation had stabilised, there was another attempt to achieve a Commodities Levy to fund the NBA itself, including aspects of research, biosecurity and market development, in 2019.  The levy was again an attempt to achieve a Commodity Levy, but this time with the ‘commodity’ being honey itself.

The levy was to be collected from all beekeepers with 26 hives or more (estimated to be 1730 beekeepers), and was to be set at a rate of 10 cents/kilogram of honey.  Before the ballot went ahead, a ‘splinter group’, now known as NZ Beekeeping (Inc) (NZBI), called for its supporters to vote against the levy, citing low profitability for honey production generally.  The ballot failed, with only 24% of the participants in favour of the levy.

Changes to the Biosecurity Act Levy

By this stage the AFB PMP Management Agency was acting independently of ApiNZ itself.  A separate board managed the PMP levy and operations.  In 2020, following consultation with those affected, the levy was changed from being ‘beekeeper and apiary’ based, to being ‘beekeeper and hives’ based.  After a challenge from NZBI to the dates for levy calculation and collection, the levy has proceeded, with the only ‘levy’ in the beekeeping industry currently based on being a beekeeper (all beekeepers included) and owning hives (with a levy per hive, with no minimum or maximum).