4 May 2018

M bovis battle: Govt risks 'burying' biosecurity problems

1:39 pm on 4 May 2018

Agriculture Minister Damien O'Connor wants farmers to pay 40 percent of the $1 billion cost of eradicating Mycoplasma bovis, but National says that's well outside the agreed framework.

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Dairy cows Photo: RNZ / Russell Palmer

Government ministers have been thrashing out the costs of fighting the disease in a grinding series of meetings with dairy and cattle industry bodies.

National Party agriculture spokesperson Nathan Guy has leaked details of the expected costs for different options proposed to deal with the disease, and accused the government of pressuring farmers to pay up to half of the costs.

"I am extremely concerned to hear that in a recent meeting with the [Agriculture] Minister Damien O'Connor he was pressuring industry to make contributions of up to 50 percent," Mr Guy said.

He said the Government Industry Agreement (GIA) signed by many - but not all - agricultural organisations set out a framework for cost-sharing between the government and various industry groups to pay for biosecurity incursions should they arise.

The agreement divides agricultural diseases into 10 categories. Foot and Mouth disease being the worst incurring an industry contribution equivalent to 50 percent of the final cost of dealing with it.

"The cost-share for any particular incursion - whether it's fruit fly or Mycoplasma bovis - is agreed between MPI and the signatories to the deed. So far 16 primary sector organisations have signed up to the GIA, and it is endorsed by farmers and growers around the country," Mr Guy said.

Farmers paying 40 percent 'the original concept' - Minister

Minister of Agriculture Damien O'Connor.

Agriculture Minister Damien O'Connor says conversations about costs are free and frank, and it's disappointing Nathan Guy is using them politically. Photo: RNZ / Richard Tindiller

However, Mr O'Connor told Morning Report the government had been up front with the industry.

"We've in fact been working through to try and finalise the figures related to the four options that are being discussed," he said.

"These are quite complex situations that are really challenging and difficult for farmers looking ahead and the industry organisations are struggling to come to some agreement on what should happen," he said.

The figures, which have been confirmed by an industry insider, show the industry and government are looking at four options for dealing with Mycoplasma bovis.

Costs for dealing with Mycoplasma bovis

  • $870m to 'close out the response' - Do nothing to curb the spread of the disease
  • $570m for 'long term management' - Industry would identify their own infected animals
  • $500m for 'rapid eradication' - Culling all animals connected to potentially affected herds
  • $450m for a 'phased eradication' - Cull infected animals and use continual testing to work towards eradication

Mr O'Connor said however that in his view those figures were underestimates.

"Underestimates of what the total cost of the disease will be but they're best estimates of what will be the contributions and options that we're going for on this," he said.

He said it could be a total $1bn cost to eradicate the disease, which would mean a $400m pricetag for farmers if he held them to shouldering 40 percent of the costs.

"These are industries that export $20bn worth of goods every year, it is a big figure but these are huge industries and while the government has a big economy as well we carefully watch where all the money from the taxpayers goes."

"Of course we will help and do our bit but we just want to sit down and have a fair deal."

He said the GIA had been negotiated by the previous government when Mr Guy had been Minister for Primary Industries.

"They gave some reasonable, very generous, discounts that would be phased out. It's probably not the agreement that I would have negotiated," he said.

"It starts off with the general principle that in an incursion industries would pay about 40 percent of the total cost, government about 60, and then the government and bodies had negotiated under the previous government down to [farmers taking on costs of] about 12 percent."

"In my view I think that's probably unreasonable, I think most taxpayers are willing to contribute to this, but you know in a situation like this if we can eradicate it will save ongoing hundreds of millions of dollars for the farmers so it's an investment now to reduce the cost of farming into the future.

He said 40 percent was the figure from which he was starting.

"If we end up at a figure around that, it may be less than that, then I think that's fair because that was the original concept."

A farmer, who has asked not to be identified, said he would be willing to pay more towards dealing with it having seen the impact of the disease firsthand.

"I think we pay enough taxes and have high enough responsibility for the country already in the economy but if that's what it takes to get rid of this so be it, as long as they get rid of it."

The farmer said allowing the disease to spread would kill the country's competitive advantage with the rest of the world.

'If you don't have compensation ... you bury these issues underground' - National's Nathan Guy

Nathan Guy

National Party agriculture spokesperson Nathan Guy Photo: RNZ / Rebekah Parsons-King

Mr Guy was scathing of the government's refusal to pay a larger bulk of the cost, however, and told Morning Report it was terrible management by the government.

"The reason that compensation is paid is so anyone, when they have any particular biosecurity issue on their particular property ... they can put their hand up and say 'hey, we've got this suspect disease on our property, can you come and investigate'.

"So it's self-referral knowing that they will be compensated. If you don't have compensation from the Crown you bury these issues underground and as a result when the crown suddenly gets onto it the disease or the pest is rife."

He said the minister also did not have the power to stray from the GIA.

"Farmers and growers have signed up to this knowing that there's an escalator when a response steps up and depending on what particular one it is, that they need to pay more.

"If we had foot and mouth disease, they'd be in for 50 percent contribution from the start, that's a given. M bovis is a lot lower that that so the minister is now well outside the GIA framework and so this has caused a huge amount of concern now for all the other industries.

"I've had a lot of people contact me this week saying 'holy hell if the minister's going to try and bully the cattle industries what does it mean for everyone else who's signed up in good faith, growers and beekeepers and the like."

The $400m figure for farmers was "a very scary number", he said.

"The priority does't appear to be rural communities, it looks like that they would prefer to give the students a piss-up with the tertiary free stuff rather than focusing in on rural communities and paying their fair share," he said.

He was also very concerned about delays for farmers whose herds had been affected getting compensation from the government.

Mr O'Connor said the discussions over costs were free and frank conversations, and it was disappointing to see them being used politically by Mr Guy.

He said it was not the case that he had thrown the GIA out, but all decisions had to be fair to all parties.

"It was a proposal that other parties hadn't signed up to ... it's not a full and binding contract on the whole of the livestock sector," he said.

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