By Michael Reddell 29/05/2018 6


Despite announcing yesterday a plan that aims to eradicate Mycoplasma bovis from New Zealand, there was no sign of the pro-active release of any background papers or analysis.

We don’t have copies of the relevant Cabinet papers, or the relevant advice from The Treasury or MPI. Not that long ago, the incoming government talked of its commitment to open government, and now it plans to spend hundreds of millions of dollars of taxpayers’ money –  without, it appears, any additional legislation – without giving us, up front, any of the relevant papers.

Here is the extract from the Minister’s statement yesterday

The full cost of phased eradication over 10 years is projected at $886 million. Of this, $16 million is loss of production and is borne by farmers and $870 million is the cost of the response (including compensation to farmers). We expect to do most of the eradication work in 1-2 years.

Government will meet 68 per cent of this cost and DairyNZ and Beef+Lamb New Zealand will meet 32 per cent.

The alternative option was for long-term management. This was projected at $1.2 billion. Of this, $698 million is the loss of production borne by farmers and $520 million of response costs.

To not act at all is estimated to cost the industry $1.3 billion in lost production over 10 years, with ongoing productivity losses across our farming sector.

We don’t know how any of these numbers are calculated. I’m not sure what the average price of cattle is, but even if it is $1500, compensation for the cull of 150,000 cattle is a long way short of $870 million. We also don’t know what reasonable probability to assign to the success of the eradication strategy. That matters, a lot.

But what we can deduce is that given the choice between long-term management and eradication, the costs of the former would be borne by the industry (farmers), while two-thirds of the cost of the eradication strategy is to be borne by taxpayers generally. As there appear to be no foreign trade issues (and even if they were, they would be costs to the industry) or food safety issues, it isn’t clear why taxpayers’ should be expected to meet any material proportion of the costs, when all the benefits will accrue to industry themselves. It has the feel of the classic line about people being keen, when they can, to socialise losses and capitalise gains.

I’m not unsympathetic to individual farmers (there are quite a few past or present dairy and beef farmers in my wider family) but why isn’t this just an industry issue, in which if the industry regard eradication as the appropriate option that strategy is funded by an appropriate levy collected, say, per head of cattle?   Most of the cattle aren’t any longer in small-scale operations (even the average dairy herd size is now 400). Between the stock and the land ($40,000 a hectare, median farm perhaps 100 hectares) and the milking equipment, a typical dairy farm isn’t a small business and the typical owner isn’t poor by any means. An increasing share of the cattle is in very large business operations.

$600 million here, $600 million there, and pretty soon you are talking serious money. If there is public money to spend so liberally on health, I’d rather it was spent on human health. I’m sure there are other pressing needs within the natural ambit of government. And, of course, there is always the option of returning our own money to taxpayers in the form of lower taxes.

I also don’t purport to understand the politics of this. Perhaps the government is dead keen not to alienate further the business community and “regional New Zealand”, but this appears to be almost wholly an industry issue, and I’m not sure that mending party political fences with elements of the business community is really a legitimate use of public money.

Perhaps there is a stronger wider public policy case to be made for this intervention? But if so, it hasn’t been made to the public so far. Instead, they are just taking our money and giving it to the farmers, to directly benefit their own industry bottom lines.


6 Responses to “Why are we gifting so much to farmers?”

  • Part of the justification, for compensation at least, is that its a taking. If the government takes your property, even for a good reason, it still has to compensate you. Over and above that, why the taxpayer is paying is not clear.

  • Indeed. My only issue is with the “who pays” question. If some farmers lose their stock for the wider good, it seems only right that those others who benefit should pay.

  • Oh wow, how did I only stumble upon these blogs now?

    Michael’s comment made me laugh. Very good sense of humour, and fairly honest assessment obviously.

  • I’ve been looking into the way in which MPI operates fairly meticulously for the last 2+ years, and would love to add some suggestions. You probably already know a bunch of what I’d like to share, but in case there’s anything of value in there I’d like to share it regardless. IMO this is just the tip of a very large iceberg.

  • I am unconvinced that eradication is even a possibility, let alone that MPI have the ability to oversee this imaginative endeavour. You’d have thought if it could be eradicated, which I don’t, that perhaps the European Union might have worked it out by now…Given it costs their industry over 500 million Euro every year, that is.

    And then there’s the scary reality that, despite MPI’s claims that this disease isn’t a health issue, published literature suggests otherwise. I.e. first isolation of Mycoplasma bovis in 1979, confirmation of transmission to a variety of other species, e.g. chickens.

    After that they might consider the potential human health impacts, given the serious conditions that a variety of other Mycoplasma species have been demonstrated, and/or are suspected to be, implicated in. MPI has confirmed that infected animals are entering the food chain, but refuse to say which slaughter facilities did the dirty work, citing economic concerns for the operations involved.

    I contacted Peter Gluckmann, he suggested I write to the MPI biosecurity board to discuss the issue. They have many board members overseeing this, and only one of them has a science qualification. It’s an undergraduate degree, in forestry.

    It’s sad, I expected more from Peter. Must admit I didn’t expect much more from MPI, on the other hand. Here’s hoping my eye sight is failing me, and I’ve read all of the published literature upside down, or something.

  • Just wait til people realize what’s going on in NZ’s pig farms. Read the most recent NAWAC/MPI reports, if any party should produce a glowing assessment of industry it is those two (or ‘that one’ really).

    Before we delve into the topic about the contribution to infectious disease, antibiotic resistant infectious disease, at at that, on NZ pig farms. Can we take a brief look at MPI’s report, which states that industry not only disagree with the Codes of Welfare, but that they collectively refuse to comply with those very codes.

    If we completely ignore the lies from MPI, that they considered all available research, despite me knowing direct from the horses mouth that they consulted Prof Emma Baxter of the UK, and ignored her world leading research in their subsequent reports. If we ignore the fact that MPI knew about and still failed to mention a wide variety of large scale studies from overseas, that are published in reputable journals, and contradict NAWAC/MPI claims. These facts still remain, which NAWAC did indeed somehow manage to include in their childish report:

    “The current code of welfare allows for up to 5% of sows to be retained in crates for a
    further week (following the 4 week maximum in crates post-farrowing) as nurse sows. This
    practice enables slowly growing or poorly performing piglets to be properly weaned. It has
    been noted that industry does not accept or comply with this requirement and some
    producers are exceeding both the maximum 5% of sows allowed to be retained for this
    purpose and the amount of time that they are being retained (i.e. greater than the one
    week maximum as stated in the code). ”

    “The current code requires that sows in any farrowing system constructed after 3 December
    2010, must be provided with material that can be manipulated until farrowing (to allow
    the sow to perform nesting behaviour which she is extremely motivated to do). It has been
    noted by NAWAC during this review that industry disagrees with this requirement and
    does not comply with this minimum standard.”

    It’s a real spit in the face to see a link at the top of the MPI page titled “See the work MPI does to improve the welfare of animals in New Zealand”. Considering they actually spend the majority of their time doing precisely the opposite, and demonstrably so.

    Never mind consulting articles such as this one, either, but the animal agriculture industry sure is a bane.

    https://www.scientificamerican.com/article/how-drug-resistant-bacteria-travel-from-the-farm-to-your-table/

    “Antibiotic-resistant bacteria from livestock pose a deadly risk to people. But the farm lobby won’t let scientists track the danger”

    “Antibiotics are used more heavily in farm animals than in people. This may be the largest source of antibiotic-resistant bacteria.
    Drug-resistance genes spread more widely and rapidly on farms than scientists ever thought, new discoveries show.
    The agriculture industry says fears are exaggerated, whereas researchers say companies are endangering public health.”

    Shame on Lincoln University for the role it plays in doing exactly what is described here. And shame on MPI for knowing all about it and failing to do anything at all to address the issue .