MPI has paid 22 farmers $3.3M in M.Bovis compo to date, still unsure on eradication

Tuesday 1st May 2018

The Ministry for Primary Industries has paid $3.3 million in 22 compensation claims to farmers impacted by Mycoplasma bovis, or about 5.5 percent of the estimated claims liability, but hasn't decided whether to try to eradicate or manage the disease.

The outbreak was first reported in July last year, marking New Zealand's first official outbreak of a disease that is present in many other countries. According to the latest data from MPI there were 32 active infected properties as at April 20. All infected properties are under quarantine controls restricting the movement of stock and equipment on and off those farms to contain the disease.

Under MPI regulations affected farmers are eligible for compensation if MPI's exercise of legal powers has caused a verifiable loss as a result of damage to or destruction of the person's property, or as a result of restrictions imposed on the movement or disposal of the person's goods. MPI has estimated the outbreak could cost about $95 million in tracking and tracing the spread of the disease and paying compensation to farmers, of which $60 million was the anticipated claims liability.

In late March the ministry ordered the slaughter of about 22,000 cows in a bid to control the spread of the disease. Of those 8,000 have been culled so far and an MPI spokesperson said it expects the majority of the culling to be finished by the end of this month.

"It may, however, not be completed on some properties until June or July as we are working to accommodate the circumstances of the individuals impacted by the cull," the MPI spokesperson said.

The meat from the culled cattle can be consumed as the disease does not infect humans and presents no safety risk. Still, economists have said the culling is a very small portion of overall slaughter that takes place annually.

New Zealand's total dairy cattle population is around 6.5 million, with 5 million of those producing milk and farmers tend to cull about 20 percent of their herds each season under normal circumstances. The latest data from Stats New Zealand shows 1.06 million adult dairy cattle were slaughtered in the year to March 2018.

As a result, the cull is unlikely to have a material impact on meat prices or milk production, said Bank of New Zealand senior economist Doug Steel.

MPI has consistently said it aims to eradicate the disease from New Zealand but "a final decision on how it should be managed in future has yet to be made," the ministry spokesperson said.

"Our recent decision to cull cattle on infected farms was to help preserve options – it was not the start of eradication. So far it has been in New Zealand’s interest to contain the disease and to track its spread to give us the best options for the future – which could be to attempt to eradicate or move to long-term management," the spokesperson said.

(BusinessDesk)

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