$886m bill: Govt to meet 68% of total cost, farmers 32%

Eradication will involve:

- Culling all cattle on all infected properties along with cattle on most restricted properties 

- All infected farms found in future will also be depopulated

- Following depopulation, farms are disinfected and will lie fallow for 60 days after which they can be restocked

- Intensive active surveillance, including testing and tracing, will continue to detect infected herds

- There will be some flexibility for farmers in the timing of culling to offset production losses

- An improved compensation claim process. MPI says a substantial part of a farmer’s claim for culled cows should now take 4-10 days, with a fully verified claim taking 2-3 weeks.

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). 

The Government expects to do most of the eradication work in 1-2 years.

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

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,” the Govt says.