The Government would monitor the effects of new regulatory regimes on the provision of agricultural chemicals and the introduction of new plants and animals, Agriculture Minister Jim Sutton said today.

Mr Sutton said that to help that process the Ministry of Agriculture and Forestry had commissioned a report which would act as a benchmark in assessing the effects of the implementation of the Hazardous Substances and New Organisms Act and Agricultural Compounds and Veterinary Medicines Act.

The report, written by the New Zealand Institute of Economic Research, says there is a perception that there is a significant risk of a substantial increase in the cost of compliance on the industry.

It says there is a perception amongst agricultural chemical companies that the introduction of the HSNO Act substantially increases the chances that they will only introduce agricultural chemicals into New Zealand after most other developed countries have approved a product for use, thus denying access to agricultural users in New Zealand of that product when their competitors already have access to it.

This could lead to farmers and growers being forced to keep using more toxic "harder" chemicals because "softer" less toxic alternatives were not registered for use in New Zealand.

The composition of agricultural chemicals is changing over time, as the market demands "softer" and "softer" chemicals. The application of these products is typically part of an integrated pest management approach. The changes in pesticide use over the past decade are primarily due to changes in land use, cost effectiveness, and the adoption of Integrated Pest Management. This means more biological and less organophosphate and dicarboximide-based chemicals are used.

In world terms, the New Zealand market for agricultural chemicals is very small ? about 0.26 per cent of world demand. The pesticides and animal health markets in New Zealand are worth about $190 million and $170 million a year respectively.

Mr Sutton said the report was commissioned after concerns were raised that the HSNO Act may impede development and innovation in the sectors, as the costs associated with gaining approval for new products were regarded as prohibitive. MAF wanted a benchmark to monitor the implementation of both the HSNO and ACVM Acts against to provide early warning of any unintended consequences.

"This report was researched and written prior to the ACVM Act and hazardous substance sections of the HSNO Act starting on July 2 this year. It is therefore based on stakeholders' perceptions of the Acts, not on any operational experience.

"The terms of reference of this report were developed by MAF to provide a benchmark for future reports."

Mr Sutton said the issue was an important one, and MAF would continue to monitor the situation to see whether the speculative concerns and issues were borne out.

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