Industry cost share for Mycoplasma bovis finalised

An agreement has been reached on how the cost for the eradication programme for the Mycoplasma bovis outbreak will be split.

In May it was announced that 68 percent of the costs are funded by Government, and the remaining 32 percent is split between dairy and beef farmers.

In a joint statement, the Boards of DairyNZ and Beef + Lamb New Zealand (B+LNZ) announced that, of the 32 percent of costs, the dairy sector will meet 94 percent of the costs of the programme, and beef six percent.

It said the funding split agreement 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 statement said.

DairyNZ's Chair Jim van der Poel was disappointed that the costs of system changes was not factored in, but has accepted the agreement.

"We understand the difficulties of doing this, and accept the recommendations and need to move forward," he said.

DairyNZ Chair Jim van der Poel accepts the need to move forward.
DairyNZ Chair Jim van der Poel accepts the need to move forward. Photo credit: Supplied

"While the panel determined the split should be funded 95 percent dairy and 5 percent by beef, using the panel's methodology across a five-year farm-gate average, the respective boards agreed that a 94 percent dairy and 6 percent beef split was a more accurate allocation," said Mr van der Poel.

The dairy sector therefore would fund approximately $272 million for the ten-year 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," he said.

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

"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.

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