Cost share for M. bo­vis fi­nalised

Waipa Post - - The Country -

The Boards of DairyNZ and Beef + Lamb New Zealand (B+LNZ) have agreed on how each in­dus­try’s share of the cost of the My­coplasma bo­vis (M. bo­vis) phased erad­i­ca­tion pro­gramme will be split.

As an­nounced in May, 68 per cent of the costs are funded by Gov­ern­ment and the re­main­ing 32 per cent is split be­tween dairy and beef farm­ers.

Of the 32 per cent of costs, the dairy sec­tor will meet 94 per cent of the costs of the pro­gramme, and beef 6 per cent.

The fund­ing split was reached af­ter a chal­leng­ing, but con­struc­tive, process be­tween DairyNZ and B+LNZ.

Both par­ties were very aware of the im­pact on their farm­ers, so sought the as­sis­tance of an in­de­pen­dent panel to pro­vide rec­om­men­da­tions con­sis­tent with the prin­ci­ples of the Gov­ern­ment In­dus­try Agree­ment on Biose­cu­rity Readi­ness and Re­sponse (GIA).

The Boards of DairyNZ and B+LNZ sup­port the panel’s view that the fund­ing split rep­re­sents 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 clin­i­cal im­pacts weighted by the far­m­gate rev­enue for milk and beef of M. bo­vis on the re­spec­tive sec­tors.

DairyNZ chair­man Jim van der Poel says a ro­bust process was fol­lowed and “although we are dis­ap­pointed that the costs of sys­tem changes was not fac­tored in, we also un­der­stand the dif­fi­cul­ties of do­ing this, and ac­cept the rec­om­men­da­tions and need to move for­ward.

“We are very grate­ful for the pub­lic sup­port and the sup­port of the Gov­ern­ment with this 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.

“We ar­gued strongly that the cost split should also in­clude the costs that would be as­so­ci­ated with changes to farm­ing sys­tems in both sec­tors if M. bo­vis was not con­trolled and erad­i­cated. How­ever, the panel felt it was too dif­fi­cult to de­ter­mine these costs and set­tled on likely clin­i­cal im­pacts in­stead.

“Hav­ing said that, we did en­ter this process agree­ing that we and Beef + Lamb New Zealand would abide by the rec­om­men­da­tions of the in­de­pen­dent panel and we also ac­knowl­edge the need to move for­ward.

“DairyNZ and Beef + Lamb New Zealand agree that due to the way the panel reached its rec­om­men­da­tion, and the unique cir­cum­stances of the M. bo­vis re­sponse, dairy cull cows will not be sub­ject to the M. bo­vis beef levy.

The dairy sec­tor would fund ap­prox­i­mately $272 mil­lion for the tenyear erad­i­ca­tion pro­gramme.

“How we fund that cost is sub­ject to a sep­a­rate biose­cu­rity levy con­sul­ta­tion with our farm­ers, which farm­ers will re­ceive in­for­ma­tion about in early 2019,” says Jim.

B+LNZ’s chair­man Andrew Mor­ri­son says the an­nounce­ment gives beef cat­tle farm­ers some mea­sure of cer­tainty of what the costs of the phased erad­i­ca­tion re­sponse will be.

“Our farm­ers are sup­port­ive of the phased erad­i­ca­tion re­sponse, but one of their ar­eas of con­cern is not know­ing what the cost of their in­di­vid­ual con­tri­bu­tions to the re­sponse would be which will be $17.4 mil­lion over the 10 years of the re­sponse,” says Andrew.

“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.” DairyNZ and B+LNZ will con­sult with farm­ers in the com­ing months on how the levies could work.

“Our dairy farm­ers will hear from us soon on a con­sul­ta­tion for a levy to re­coup this cost and we en­cour­age all dairy farm­ers to tell us what they think. We also need to ac­knowl­edge the sup­port from the Gov­ern­ment and the pub­lic for erad­i­ca­tion — this has been heart­en­ing,” says Jim.

“The en­cour­ag­ing signs from spring bulk milk test­ing are show­ing that erad­i­ca­tion looks very achiev­able.” For beef cat­tle, the con­tri­bu­tion will be col­lected through a sep­a­rate biose­cu­rity levy at the point of slaugh­ter, in ac­cor­dance with the pro­posal B+LNZ put to farm­ers last year about join­ing GIA.

The re­spec­tive boards of DairyNZ and B+LNZ have also agreed to re­lease the de­tails of the rec­om­men­da­tion given by the In­de­pen­dent Panel so that farm­ers can bet­ter un­der­stand the ra­tio­nale be­hind the split.

■ Check­vis or­coplasma-bo­vis for the in­de­pen­dent panel’s re­port and more in­for­ma­tion.

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