The Nation: Agriculture Minister Damien O’Connor
On Newshub Nation: Simon Shepherd interviews
Agriculture Minister Damien O’Connor: 12 May
Simon Shepherd: The Minister of Primary Industries is halfway through a cull of 22,000 cows. It could be just the tip of the iceberg. So I asked Agriculture Minister Damien O’Connor how many farms are now affected.
Damien O’Connor: We have 38 farms. They are infected. They’ve been tested, confirmed. There are up to 70-plus farms that are likely to be infected. We’ve got hundreds under investigation and up to 300, and then we’ve got up to 1700 that are of interest. So quite a large number.
So 1700. Do you know how many cows are on 1700 farms that could possibly be affected?
No. It’s a hell of a lot, and at the moment we’re halfway through the process of culling 22,000, and there’s up 60,000 potentially in those infected properties already identified. So the numbers are very, very big.
You’re talking up to 60,000 cows. You’re culling 22,000. You’re halfway through that. Are you still aiming for eradication? Is it actually feasible?
We’re still aiming for that. We are having active discussions on a daily basis as to the changing goalposts, I guess, as we do more research, more tracking, identify more properties. And clearly the balance of probability changes. So we hope that we can eradicate. It will obviously take a lot longer. We’re not at the point where we’re saying we can’t.
Okay. When do you get to that point?
It’ll be a discussion we have with industry. We’re meeting with them next week. We have all the information in front of them as well as in front of officials. We’ve got a technical advisory group. We’re getting all the advice that we possibly can, and hopefully we can make the right decision not just for farmers now but for the farming sector into the future.
So, we understand that moving day or gypsy day is coming up where share milkers move their herds around. Are you going to let that go ahead?
We’re very conscious of that date, and we’ve always been attempting to be in a position to make a clear call prior to the end of May. And some farmers and some people may have shifted stock, but any infected place, any infected farm will not be able to shift stock. Any farm with a notice of direction will not be able to shift stock, so that’s a restriction on them now. In terms of the other farms, we’re just hoping that farmers take a sensible approach to this and that they’re not going to ignore NAIT and that they’re going to adhere to the requirements of traceability.
NAIT is the national animal tracking system you’re talking about.
It is, yes.
Okay, but how can you let, say, moving day go ahead if you don’t know the scale of the problem, and infection cows or potentially infected cows could be going anywhere.
Well, that is true, and, as I say, we’ve been doing more testing, more investigation, and the scope of the infection is a lot wider than the original modelling that we had. The situation’s worse than we thought it was. That is unfortunate. We’re having to deal with that on a day-to-day basis and try and eliminate, but clearly the chances of rapid eradication have almost gone. Long-term eradication’s still possible. We have bovine tuberculosis in this country. It’s not identical but it’s similar to this. We’ve taken on a programme of long-term eradication, and we believe that we can take the same approach to Mycoplasma bovis. But those final decisions are yet to be made.
Let’s talk about how we got to this situation. MPs yesterday were told that there is a black market operating and that cows are being traded for various goods and services rather than going through the official channels. Do you how widespread that is?
Look, it’s hard to identify how widespread, but clearly it’s something that has been exposed through this unfortunate mycoplasma incident. We are finding out a lot more. I think farmers are realising the importance of adhering to NAIT. This has been a wake-up call for the whole livestock sector across New Zealand, and hopefully we can learn from this and put ourselves in a better position for the future.
Okay. Farmers who have been trading on the black market are not going to be honest about where their cows have come from and where their cows are going. They’re going to remain below the radar. So that creates a whole new area of uncertainty as to where these cows are going.
I think that people purchasing stock have to be clear they know exactly where they’ve come from, and I think I’ve spoken to a number of farmers who have received stock in the past. They haven’t been too clear where they’ve come from. They’ve trusted the stock agent or the person selling. I think that will change and people will have to adhere to a higher standard of proof.
But given that kind of revelation how can you possibly control this disease, let alone eradicate it?
I think in the end, as we’ve hoped, farmers would have adhered to NAIT, would be part of a biosecurity system that understands the risks. Unfortunately they’ve taken it for granted and they’ve been too lax.
So the farmers have been too lax. The farmers are at fault here?
I think the signals that have gone to them from, firstly, the Government when they kind of introduced NAIT and then never enforced it have been pretty kind of soft, and the importance of it hasn’t been highlighted to the farmers from their leaders.
Okay, so, we’ll talk a little bit more about that in a moment. Just on the black market, how are you going to crack down on that? Because they’re just trying to avoid tax, aren’t they, remain below the tax radar?
It’s illegal from an IRD perspective, and so unfortunately as much as we try, we can’t stop some people conducting illegal activities. But we will try and clamp down on that. There’s talk of actually registering stock agents to ensure that any movement of stock through their hands adheres to an ethical standard and that they need to be registered. Similar, I guess, to real estate agents. But in terms of farmers giving an animal for some payment, I guess we’ve just got to highlight to the farmers the risks, the biosecurity risks of doing that, let alone the risks, I guess, through IRD.
So is personal greed of some small band of farmers putting the whole sort of reputation of New Zealand of risk and putting the whole industry at risk with this disease?
Yes, it is.
So the personal greed of some small band of farmers has caused all this?
Look, we can say that 70 per cent of farmers haven’t adhered properly to the NAIT requirements in transferring animals from one farm to another—
Seventy per cent?
So that’s a lot of farmers, and they haven’t done so to try and break the law. They’ve just not been aware of the dangers of taking that casual approach. I think this unfortunate incident will wake them all up.
So we don’t know how far it’s spreading, how many cows are going to be, whether you can eradicate it or whether it can be contained. This is a bit of a disaster, isn’t it?
Yes, it is.
It’s a disaster. You admit that.
And this is something— probably my single biggest political challenge. Probably the biggest challenge for the livestock sector in New Zealand. We have to be honest about that, and I guess focusing on the best possible way forward is what we are focusing on now. We can’t cry over spilt milk. What’s been done has been done. We’ll answer a few questions in hindsight. The focus now is making the right decision to try and reduce the impacts of Mycoplasma bovis.
Okay, let’s talk about the national animal tracking system that you say 70 per cent of farmers have not been adhering to. You put the blame on the previous government and the farmers, but what are we going to do now about it? Are you going to beef it up? The fines are only between $150 and $1000 for not reporting movement of a cow.
There are over 40 recommendations from the review. We will go through each and every one of them and make the changes necessary. It’s from the top in an area of governance where it’s been lacking all the way through to the design of the tags. We’ll be changing think, and I think farmers will appreciate that they’re going to have to adhere to the standards and the requirements of the system in the future.
Otherwise we’re going to have another disaster like M bovis?
We could do. In fact, we’re under constant threat from biosecurity diseases and pests and organisms coming into the country. We need to be in a position to react. These things are coming in all the time. We run a pretty good system, but it’s not perfect. But being in a position to react quickly and shut it down or eradicate is what we’re aiming for.
Okay, let’s talk about the changes that you want to make to this tracking system. Are you going to beef up farms dramatically? Are farmers going to have a lot more incurred costs because they have to be more responsible or have to adhere to a higher compliance in terms of animal tracking?
They’ve always seen this as a cost. This is an investment. The consumers buying their products want to know exactly where they’ve come from and in fact how they’ve been produced. Blockchain and all these other systems now enable the consumer to work out how this product has been made. The farmers need to appreciate that a decent animal tracing system provides them with a marketing tool, and if they’ve adhered to animal welfare standards and environmental standards, labour standards, and they produce a quality product, they’ll get more for it.
You’ve estimated that it could be up to $870 million for total eradication, but the scale of the problem is changing every day, getting bigger. Do you know how much this is going to cost?
Look, some of that cost estimate includes, at the best guess, around the effect on the industry over a 10-year period. I think that the cost to the industry in managing this may be greater. Farm systems will have to change. The way that farmers approach their animal movements will have to change. There’ll be a cost incurred with that. It’s a necessary cost. That’s why, I guess, if we have a decent system; we adhere to the biosecurity standards and animal welfare; we’ve got to get more from the marketplace for what we produce to cover the cost of a proper animal production system.
Okay. So you say that our meat and our dairy and our milk might be worth more if we have such a system adhered to. But in the short term, the cost is going to be there. So it’s going to be $1 billion, $2 billion? Have any forecasts been put in place?
Well, that’s shared. I mean, obviously, there’s some upfront costs from the taxpayer that will contribute to help eradicate and minimise the impacts of this. The industry players will have to front up — that’s, effectively, the farmers. And then there’s an ongoing cost. As I say, a best guesstimate on what each farmer will have to do. And, I guess, farmers are all different. They run different farm systems. If we give them good guidance on what best to do, then, hopefully, they can minimise the cost to their own operation, but they’ll have to do what they have to do.
Well, let’s talk about what the farmers are going to have to pay in a sec, but is Cabinet going to approve more money to fight this? Is there going to be more money in the budget? What’s going to happen?
There will be more money to fight this. Yes, there will be.
We haven’t worked that out yet, and I have to take that proposal to my Cabinet colleagues. It’ll be alongside industry, because it’s an investment in their future as well as an investment for the taxpayer and our future.
Okay. So you are putting it back on the farms and saying that the industry itself will have to stump up some cash. How much is the industry going to have to pay to clean up this mess?
Well, I don’t know. As I say, the final cost has not been estimated. We’ve fronted with over $85 million, plus ongoing operational costs. The industry said that they’ll front with just over $11 million. I think the cheque’s still in the mail. We’ve got to sit down with them. There was a Government Industry Agreement concept, developed under the Labour government, actually, after the Varroa mite came in, that said we’d sit down with industry, work out who does what in the event of an incursion. And then what the last National government did is said, ‘And we’ll do a cost-sharing arrangement on the basis of 40:60 — 60 per cent from the taxpayer, 40 per cent from the industry.
So you’re saying farmers, the industry, are going to have to pay 40 per cent to clean this up?
No, I’m saying that was the basis of negotiation. Now, what the National government did, they reached an agreement— Well, they didn’t reach an agreement. In fact, the two major players Dairy NZ and Beef and Lamb didn’t sign any agreement. A principled agreement about cost sharing that started at 40 per cent, then gave a 20 per cent discount because of exacerbator contribution, and then the Government, to ease the way or to try and get the people on board, said there’ll be transitional discounts that said that, I think, in this year, by some of their calculations, was 12 per cent of the total cost.
Right. So we talked to Federated Farmers, and they believe that 12.8 per cent is the figure that they have been negotiating towards in terms of cleaning up this kind of mess.
That’s what they were talking about as an original transitional discount for a principled agreement that was based on 60:40.
So, at the moment, we don’t know, the industry doesn’t know and the Government doesn’t know who’s going to pay how much, or even the percentage terms?
That’s correct, and we’re working through that with them. I’ve been right up front with them, saying that the principle from a PSA incursion was that the kiwifruit industry fronted up with 50 per cent of the cost — $25 million upfront. The government contributed 25. They got on, did the job, and I think the outcome’s been a positive one. I said upfront to the industry players 60:40 is where we start, because the taxpayer’s contributing a lot to a lot of other things — hospitals, schools, a lot of unfunded commitments by the previous government. You know, money’s not there for everything, but we are committed to assist the industry. The question for them is how much did they consider was a good investment in their future.
Do you have a figure in mind?
No. There are different proposals around the four different scenarios that we have. And all those figures have been shared with the industry players and are in the process of being updated on the basis of new information.
It’s pretty urgent, though, isn’t it? As this problem is growing, they’re wanting to know what they’re going to have to pay for, how much they’re going to have to pay, and whether that’s going to make their farms viable.
Absolutely. Well, look, the issue is that we can’t afford not to spend this money, and we have to get on with it and do what we can to eradicate, to reduce the infection load across the country. And the farmers have to work out what level of investment is worthwhile to reduce the cost not just to them, but, actually, to future generations.
All right. Should the whole industry have to pay somewhere between 12.8 per cent and 14 per cent? Should the whole industry have to pay that for the, sort of, probably, reckless behaviour of a few people that may have brought in infected cows and shipped them around on the black market?
Yes, I think they should. Because one of the issues and the challenges we’ve had is that 70 per cent of the farmers haven’t adhered to a system that they should’ve been through the NAIT system. And so, I guess, everyone shares some of the responsibility; everyone will share some of the cost.
But, so, cows are being culled now — up to 22,000 by the end of May. If you can’t eradicate it, why are we killing these cows?
Well, I think that’s a fair question, and we’ll reach a point with the industry. The general view has been— and there’s certainly anecdote from the UK where they took a softer approach that farmers are now saying, ‘I wish we’d killed it all and been far more ruthless with our eradication attempts.’ I think the question is — to what extent should we reduce the infection load or potential infection load for the country so that we are in a position over time then to try and eradicate?
Okay. Let’s talk about biosecurity. I mean, we’ve got this here now. Do we need to beef up biosecurity? And what if this had been an even more serious disease, like foot-and-mouth?
Well, to some farmers, it’s as serious. There are no trade implications here. Yes, we do need to beef up our system. It’s been squeezed. We’ve had increase in trade, increase in tourism numbers.
So more money for that in the budget?
You’ll have to wait and see. And, clearly, what we’ve done is set up Biosecurity New Zealand as a separate business unit within MPI so that everyone coming into New Zealand and working around New Zealand sees an agency that is focused on biosecurity.
What confidence do we have in biosecurity at the moment?
I think it’s pretty good. I think our systems are very good.
But you’ve admitted that this is a disaster, so how can it be good?
This is one. And all the pathways that had been assessed for Mycoplasma bovis were assessed as low-risk, but that’s not no-risk. So best attempts cannot guarantee something like this happening. So we have the best possible defence, but then we also have to prepare for something like this. We have to beef up the defence, in my view. We’re going to have an intelligence unit working offshore to assess the changing risk. We’ve got climate change around the world. We’ve got increasing trade, increasing tourism. We have to be up with the best in the world.
And how damaging is this for our international reputation? Because it doesn’t look like one, we’ve spotted it, and secondly, have got it under control, or third, even know how big it is.
No, I think it’s a positive.
It’s a positive? How can it be a positive?
Most other countries have got Mycoplasma bovis. The fact that we’ve focused and been in a position of trying to eradicate, I think, is a positive for us. There are no issues in terms of trade or the consumption of meat. There are issues in terms of the cost of production for our internal farming system. I think people who look at this, and we’ve had the best international advice we can, are saying that we’ve done the best possible thing we could to try and eradicate this. We’ll have a review, no doubt, but so far, the feedback from the Technical Advisory Group is saying that we’ve been doing as much as we possibly can.
Damien O’Connor, Agricultural Minister, thank you for joining us.
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