Cow disease could cost $95m

The Ministry for Primary Industries estimates the Mycoplasma bovis outbreak could cost about $95 million in tracking and tracing the spread of the disease and paying compensation to farmers, Parliament’s primary production select committee heard.

MPI director of readiness and response Geoff Gwyn told politicians the ministry has budgeted $35m of operating expenditure for the response until the end of the financial year, which has seen it perform 95,000 serum tests, and believes its claims liability will be $60m. To date, the disease has been confirmed at 26 properties which form part of 43 properties under a restricted place notice, he said. A further 55 properties have been placed under a notice of direction, and on top of that more than 670 farms are under some form of surveillance.

Gwyn said the ministry has investigated ways to fast track compensation payments, including interim distributions and accepting multiple claims to help ease farmer cash flow, and has received 51 claims and paid about $2.6m to 10 of those either in part or in full. Property owners can lodge claims for any verifiable losses caused by MPI enforcing its powers.

“We are mindful of the impact cash flow has on business,” he said. It’s a process we’ve streamlined as fast as possible — the reality is we still have situations where farmers are feeling as though they’re not being compensated but in reality they’re not putting in a claim at this point. It’s pretty hard to process a claim that hasn’t been submitted.”

Mycoplasma bovis was first confirmed in July on two farms in South Canterbury, marking New Zealand’s first official outbreak of a disease that is present in many other countries.

Director-general Martyn Dunne told politicians the ministry is still optimistic it can eradicate the disease, but that a final decision will be made this month.