An FMD outbreak could wipe $10 billion off the economy

While the NAIT Act 2012 has the potential to be a key initiative in improving New Zealand’s biosecurity regimes, thus ensuring our meat and livestock exports remain competitive, David Webb of corporate advisory firm PPB Advisory says the scheme fails to achieve one of its key purposes.

david webb ppb primary magazine nait actThe NAIT scheme in its current iteration misses the mark as a biosecurity control because it covers only cattle and deer, excluding the estimated 40 million sheep in New Zealand, and protection from foot-and-mouth disease (FMD).

According to NAIT, cattle and deer are the focus of the scheme because they are already included in mandatory animal identification schemes in the National Bovine Tuberculosis Pest Management Strategy. However, this strategy was implemented to control tuberculosis infection and does not consider other devastating diseases.

Reserve Bank and Treasury figures show that an FMD outbreak could wipe $10 billion off the economy, result in the loss of 20,000 jobs, close export meat markets for up to 12 months and depress the same markets for a year.

While provisions have been made for other species to be accommodated by the NAIT IT system, the decision for these species to join the scheme has been left to industry groups, in a year where economic pressures are already weighing on farmers.

The projected significant cost to farmers appears to be the underlying reason for the exclusion of sheep from the scheme. NAIT Ltd estimates levies could cost approximately $5.50 over the lifetime of the animal – often less than four months for a lamb. When you consider that the average lamb sells for around $80 on the hook, the loss in profit is substantial.

In addition, we have already seen costs such as the levies imposed by stock agents, applied on animals passing through sale yards. This is, reportedly, to recoup time spent entering animal movements, and the investment in technology required to administer NAIT tagged animals.

 Further, drawing comparisons to similar schemes internationally, NAIT’s projected cost of $8 million per annum to support the scheme seems relatively low. Their estimates are focussed on implementation, however it remains unclear as to whether they’ve allowed for an event where the data actually needs to be used and analyzed.

On the surface, NAIT certainly has potential. Yet PPB Advisory feels that as long as the scheme only covers a proportion of livestock, it fails to enhance New Zealand’s ability to respond more quickly if there is a biosecurity threat. As such New Zealand farms continue to be exposed to potentially devastating disease risks.

PPB Advisory provides strategic, operational and financial advice to companies, government bodies and financial institutions. It has a dedicated rural and agribusiness team of 22 agri specialists across New Zealand and Australia.

 This piece originally appeared in Primary magazine. Click here to subscribe.