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MPI says cost of M Bovis response, claims in the realm of $95 mln

Thursday 1st March 2018

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The Ministry for Primary Industries estimates the Mycoplasma bovis outbreak could cost about $95 million in tracking and tracing the spread of the disease and paying compensation to farmers, Parliament's primary production select committee heard. 

MPI director of readiness and response Geoff Gwyn told politicians the ministry has budgeted $35 million of operating expenditure for the response until the end of the financial year, which has seen it perform 95,000 serum tests, and believes its claims liability will be $60 million. To date, the disease has been confirmed at 26 properties which form part of 43 properties under a restricted place notice, he said. A further 55 properties have been placed under a notice of direction, and on top of that more than 670 farms are under some form of surveillance. 

Gwyn said the ministry has investigated ways to fast track compensation payments, including interim distributions and accepting multiple claims to help ease farmer cash flow, and has received 51 claims and paid about $2.6 million to 10 of those either in part or in full. Property owners can lodge claims for any verifiable losses caused by MPI enforcing its powers. 

"We are mindful of the impact cash flow has on business," he said. It's a process we've streamlined as fast as possible - the reality is we still have situations where farmers are feeling as though they're not being compensated but in reality they're not putting in a claim at this point. It's pretty hard to process a claim that hasn't been submitted." 

Mycoplasma bovis was first confirmed in July on two farms in South Canterbury, marking New Zealand's first official outbreak of a disease that is present in many other countries. While the disease presents no food safety risk, it can cause a range of symptoms in cattle including mastitis that doesn’t respond to treatment, pneumonia, arthritis and late-term abortions.

Director-general Martyn Dunne told politicians the ministry is still optimistic it can eradicate the disease, but that a final decision will be made this month. 

"Our aim is to eradicate. We're not going to say we're going to long-term management now - our aspirations are to remove this if we can from the New Zealand herd," he said. 

MPI has gone back to the government for funding the response where it's needed to, and Dunne said he's "confident" it will be considered in the upcoming budget requests. 

Dunne said the ministry is negotiating with industry on its financial contribution to the outbreak, and said he would prefer cost recovery being through a government industry agreement rather than outside that process. 

(BusinessDesk)

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