Dairy carries M bovis cost
Dairy farmers will foot 94 per cent of the industry bill for the phased eradication of Mycoplasma bovis, with beef farmers paying the remainder.
In May, the Government announced it would pay 68 per cent of the estimated $870 million needed to fight the cattle disease, first identified in New Zealand last year.
The remaining 32 per cent would be split between dairy and beef farmers.
DairyNZ and Beef and Lamb New Zealand announced last week the dairy industry would cover 94 per cent of industry costs and beef 6 per cent.
In a joint statement, the boards said the funding split had been reached after ‘‘a challenging but constructive process’’.
Both supported the view of an independent panel that the split represented a reasonable allocation for the costs of the M bovis response, considering the relative economic size of the two sectors, the risk of infection and the potential economic impacts of the disease for both sectors.
DairyNZ chairman Jim van der Poel said the organisation was grateful for public and Government support for the eradication effort. ‘‘If we hadn’t moved to eradication, the alternative – to do nothing and let this disease spread throughout our stock – would have been a serious challenge and the costs higher, estimated at $1.3 billion. This was the better outcome,’’ he said.
The dairy sector would fund approximately $272m for the 10-year eradication programme, van der Poel said.
Farmers would be consulted on how a biosecurity levy to meet the costs could work. As an indication, a levy of approximately 2.6 cents per kilogram of milk solids over three years would cover the costs incurred so far and up to June 2020.
That worked out to about $4100 per year for an average size farm.
Beef and Lamb chairman Andrew Morrison said the organisation’s farmers would pay $17.4m over the 10 years.
‘‘Though the final total cost of the phased eradication programme is dependent on a number of factors, having a split agreed by industries means we can now calculate possible levy rates and start consulting with farmers about the practicalities of meeting the beef sector’s share of costs of the response,’’ he said.
The cost per head of beef cattle would depend on the timeframe chosen by farmers to spread the total cost, including the sector’s share of the $11.2m already incurred, over. For example, beef farmers could begin with a levy of up to $4.80 per head for the first year, reducing to around $1.70 for year two, and then reducing steadily and significantly as the response went on.
‘‘If we hadn’t moved to eradication, the alternative would have been a serious challenge ’’
Jim van der Poel