Cow disease costs farmers $278m
Most farmers are reconciled with shelling out $278m as part of their cost to banish the Mycoplasma bovis cow disease from New Zealand shores.
Dairy farmers will fork out the greater proportion - perhaps more than 80 per cent - of the cost with sheep and beef farmers paying the rest.
Most of the bill will land in the first few years in exchange for Cabinet signing off on Monday a joint eradication decision between the Government and industry groups.
The Government has decided to cull about 126,000 cattle on top of the 26,000 already being destroyed in an attempt to knock off the disease.
All cattle will be removed from infected properties and most restricted properties, at a cost of $886m in a phased eradication.
Two-thirds of the total cost - some distance to the estimated $1.2 billion to manage the disease - will be borne by the Government.
The farmer contribution would likely come from an additional levy with possible lending assistance from the Government.
Both DairyNZ and Beef +Lamb NZ said they did not have to seek consent from farmers for the extra levy. Under the Government Industry Agreement (GIA), a levy can be raised to deal with emergencies such as M. bovis.
‘‘We will not fund M. bovis from our existing levy. We’ll look at introducing another levy or some other mechanism. We have already engaged with our farmers through the GIA and within that there is a provision to introduce a GIA levy,’’ DairyNZ chairman Jim van der Poel said.
DairyNZ did not yet know what it might cost an individual farmer.
‘‘We have to work out whether we fund that over one year or over a number of years.’’
Matamata dairy farmer and Waikato Federated Farmers dairy chairman Ben Moore supported the decision. He said he was comfortable if his milk income was levied with the funds going towards eradicating the disease.
He said he was also pleased with the news the MPI would try and speed up the compensation process for farmers who had their cattle culled.
It also gave farmers certainty about the future now that a decision had been made.
‘‘Now we can get on with farming.’’
The decision also won the support of industry groups. Federated Farmers president Katie Milne said getting rid of M. bovis was preferable to living with it, for years on end, probably without any compensation available for farmers in future when it did hit and could not be controlled.
‘‘For me personally, the only ‘silver lining’ of this biosecurity response is that the whole farming sector has worked together so well. Now we have to crack on and give it our best shot to recover from this threat.’’
Van der Poel said the decision reflected their hope that the disease could be eradicated.
‘‘Our farmers have been waiting for almost eleven months on a way forward and part of the challenge has been a lack of certainty about the longterm solution for New Zealand. Today we have that certainty.
‘‘Over 99 per cent of our dairy herds in New Zealand have no signs of this disease, and we want to keep it that way.’’
DairyNZ chairman Jim van der Poel says the industry cost of eradication will come out of a special levy.