Diesel Fuel Rebate Scheme: agriculture - weed, pest or disease control

Is the undertaking of inspections of commercial farms to monitor levels of various pests and diseases, and the provision of advice to commercial farmers on the control and management of the pests and diseases identified by a statutory body, within the definition of 'agriculture' under subsection 164(7) of the Customs Act 1901 ?

No. The undertaking of inspections of commercial farms to monitor levels of various pests and diseases, and the provision of advice to commercial farmers on the control and management of the pests and diseases identified by a statutory body, is not within the definition of 'agriculture' under subsection 164(7) of the Customs Act.

A statutory body established under a State Act has the objective of assisting a particular primary industry by improving the quantity and quality of their crops.

Employees of the statutory body conduct the following types of weed, disease and pest activities: (a) regular farm inspections to identify the types of diseases and pests present and to monitor disease and pest levels over time, (b) inspections in response to requests by growers to assist in identifying pests and diseases, and (c) the provision of advice on their control and management.

The statutory body does not receive any payment for the conduct of these activities. The growers who are assisted by the statutory body are commercial growers who grow crops as a business undertaken to obtain produce for sale.

Under subsection 78A(1) of the Excise Act 1901 and subsection 164(1) of the Customs Act, a diesel fuel rebate is payable to a person who purchases diesel fuel for use by them in 'agriculture' as defined. Subsection 164(7) of the Customs Act states that 'agriculture' means: ... (b) the cultivation or gathering in of crops; or ...

and includes: ... (y) weed, pest or disease control undertaken: (i) by a person who carries on the core agricultural activity; (ii) by a person contracted by that person to carry out weed, pest or disease control; on the agricultural property where the core agricultural activity is carried on; or...

The phrase 'weed, pest or disease control' is not defined in the legislation and therefore takes on its ordinary meaning.

The Macquarie Dictionary 2001, rev. 3rd edn, The Macquarie Library Pty Ltd, NSW defines the verb 'control' as 'to hold in check; curb'. Therefore, for an activity to be considered 'weed, pest or disease control', it must be an activity to curb or keep in check weeds, pests or diseases.

The monitoring of weeds, pests and diseases may provide useful data. However, the simple monitoring of the incidence of various pests and diseases cannot of itself be considered 'weed pest or disease control' as it is not an activity that is curbing or keeping in check, weeds, pests or diseases. Similarly, while activities such as the application of herbicide, the planting of appropriate varieties of the crop and baiting rats can be considered 'weed, pest or disease control', the simple provision of advice, which may or may not be complied with, on appropriate weed, pest or disease control measures does not constitute 'weed, pest or disease control'.

Even if it were conceded that, these activities did constitute 'weed, pest or disease control', in this instance these activities would not fall within the definition of 'agriculture' as the statutory body neither: (a) undertakes the weed, pest or disease control activities on the agricultural property where they carry on their core agricultural activity, nor (b) are they contracted to the commercial grower to undertake the weed pest or disease control activity.

Therefore, the inspection and monitoring of farms and the provision of advice on pests and diseases by the statutory body does not fall within paragraph (y) of the definition of 'agriculture' in subsection 164(7) of the Customs Act.

The 'cultivation ... of crops' takes on its ordinary, common meaning, which contemplates activities related to the growth of the crop and to the tending and caring for the crop during the process of growth.

It is accepted that monitoring a growing crop for the presence of pests and diseases is part of the tending and caring for a crop during the process of growth. However, it must be asked whether the monitoring of a crop can be considered 'cultivation of crops' in its own right.

The last significant changes to the definition of agriculture in the Customs Act were made in 1995. The Explanatory Memorandum to the Customs and Excise Legislation Amendment Bill 1995 states that the principle changes proposed by the Bill involve: ... the amendment of the definitions of agriculture ... to specify a clear list of activities in which the use of diesel fuel is to be eligible for the payment of rebate...

and more particularly ... the purpose of the omission and substitution of the definition of "agriculture" is to clarify that the ambit of the DFRS is restricted to paying rebate on diesel fuel purchased for use in the preparation of the soil, the act of growing primary produce or rearing livestock and for use in other activities that are sufficiently connected with the "agriculture" to be considered eligible for the payment of rebate ...

Thus, the 'cultivation ... of crops' can be seen as meaning the whole act of growing primary produce. The whole act of growing primary produce can encompass a range of individual activities related to the growth of the crop and to the tending and caring for the crop during the process of growth. However, the undertaking of a single activity, such monitoring a crop, independently of the whole act of growing primary produce is not, in and of itself, sufficient for that single activity to be considered the 'cultivation of ... crops'.

The statutory body simply monitors the presence of diseases and pests, and provides certain advice in relation to disease and pest control. They do not undertake any other activities that constitute the whole act of growing primary produce. The undertaking of a single activity, such as the monitoring of a crop, independently of the whole act of growing primary produce is not sufficient to allow that single activity to be considered the 'cultivation of ... crops'.

Consequently the weed, pest and disease control activities of the statutory body are not sufficient to be considered the 'cultivation of ... crops' for the purposes of the Customs Act and a diesel fuel rebate is therefore not payable for these activities.