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6. The Agrecovery Solution

For the last 4 years, key stakeholders in the New Zealand agricultural chemical industry (including growers, retailers, brand owners, local and central government) have been working cooperatively on a product stewardship solution for used agrichemical containers. The Agrecovery programme has been designed as a solution for responsible brand owners/manufacturers to provide for the collection of their customers' used containers.

Figure 2. Movement of products and finances now and in the proposed Agrecovery system

 

The programme is designed to recover used containers that are Agrecovery-branded. This means it will only be used for products from member companies. Membership of Agrecovery is open to all producers in the sector.

It is anticipated that the Agrecovery programme will be operational by March 2007.

6.1. Agrecovery structure

In December 2005, the Agrecovery Foundation was formed as a not-for-profit trust to own and govern the Agrecovery programme. The formation of the Foundation is the result of a number of years of work on an industry product stewardship scheme for used agrichemical containers.

 

Figure 3. Structure of Agrecovery programme

 

The legal entity which owns and governs the Agrecovery programme is the Agrecovery Foundation.

Founders and Trustees of the Agrecovery Foundation are:

  • Agcarm Inc;
  • Federated Farmers of New Zealand Inc;
  • Horticulture New Zealand Inc;
  • Environment Waikato (for Local Government New Zealand);
  • Fonterra Cooperative Co Ltd.

The New Zealand Agrichemical Education Trust (NZAET) will be the administrator for the Agrecovery Foundation.

The Agrecovery Foundation will contract a programme manager to deliver an agreed programme on its behalf. The Agrecovery programme manager will manage infrastructure, logistics, administration and communications.

The programme manager will invoice the Foundation for these tasks. The Foundation will in turn invoice the Agrecovery Fund based on these costs.

6.2. How the programme will work

The Agrecovery programme will provide a nationwide collection network to take triple-rinsed plastic agrichemical containers from farmers in New Zealand.

Records of compliance (for reporting to EurepGap etc) will be available to farmers who participate.

Agrecovery collection sites will be sited at retail merchants (where appropriate) or local authority transfer stations. Collection facilities will be operated by staff who will be specially trained to inspect and accept triple-rinsed containers that belong to the Agrecovery programme. Specialist collection vehicles are proposed that will "process" the material collected via a mobile shredding unit. There will be five collection regions throughout New Zealand, each one serviced by a contracted collector who in turn will service the 75 collection sites proposed.

Collections in each region will be determined by the availability of product. Those in high-producing regions will have access to collection sites that will be open every Saturday throughout the year. Those in smaller growing regions will have access to a collection site on the first Saturday of every month.

It is proposed that large-scale applicators (commercial applicators, large farm units) will be serviced directly. They will be able to log their collection requirements via a managed website. This will direct the contractor to the location when next in the area servicing the collection site for that district. This is likely to attract a user charge which is yet to be determined.

Collected material will be transported to "Approved Processors". An Approved Processor will be required to meet specified minimum standards of processing. These standards will be in line with international standards currently applied to other agrichemical container collection programmes worldwide.

The Agrecovery programme will work towards collection and recovery targets that will be set in consultation with key stakeholders. Performance against these targets and other criteria will be reported in an annual report.

There will be a significant investment in education and promotion for Agrecovery in order to maximise farmer participation. This communication will take place in close association with local and regional government.

Figure 4. The movement of product through the Agrecovery system

 

6.3. Alternative models

Agrecovery is the first formalised take-back scheme for an entire industry sector in New Zealand. The Agrecovery model has broken new ground in New Zealand, and has drawn on overseas experience in its development. Alternative models have been considered throughout the scheme development, but these considerations have not been part of a formalised process.

Some agrichemical companies already operate schemes to recover larger containers (over 100 litres) for re-filling. This is because the cost of new containers is higher and justifies bringing back containers, cleaning them and refilling them. The results of their take-back programmes are mixed, with most reporting poor recovery rates (as low as 5%). Agrecovery has identified the recovery of larger containers for reuse as a useful service to offer companies in the future and will progress that issue once the infrastructure is in place and the initial service offering is bedded down. It is believed participation rates may be higher when there is a readily available infrastructure that farmers will be using already for their smaller containers.

6.4. Financing Agrecovery

Agrecovery is a product stewardship programme underpinned by contributions by brand owners. Once up and running, the programme will be funded on an ongoing basis by way of a levy on product put in the market by participating brand owners.

The Agrecovery programme has initial establishment funding requirements before levies are able to be collected. These are costs associated with setting up systems and structures under which the programme will operate. These initial costs are estimated at $233,000 and will be met by a mix of government and industry/stakeholder funding.

Additional start-up capital investment will also be required. These costs will be met by the programme manager and "amortised" through the programme costs charged to the Agrecovery Foundation.

Following set up of the programme, there will be ongoing costs associated with the collection and processing of product and the management of the scheme. These will be met by a levy. The Agrecovery Business Plan has set out a range of levies of between five and 14 cents per litre/kg of product placed into the market. On a widely used product such as glyphosate, the levy represents approximately 0.8% to 2% of the price of the cheapest product available on the market.

The final levy will be determined by the quantity of product placed into the market by participating brand owners. This levy will fund the ongoing collection and processing of collected product.

Based on estimated volumes of product to market in New Zealand the total cost of the programme will be between $1.4 million and $1.5 million per year.