James Parsons — Farmer and OSPRI Board Member
So Kevin, NAIT’s hitting the road around the NAIT levy increase. Give us some context of why is this happening?
Kevin Forward — Head of Traceability, OSPRI
So for the last couple of years, we've had to increase our expenditure to respond to what farmers and industry asked for on the back of the M bovis outbreak — about making the system easy to use, about increasing our level of support, both regionally and in our Support Centre to reduce those call wait times.
But we're running out of money in regards to the reserves that we've had to fund that work.
James Parsons — Farmer and OSPRI Board Member
As a farmer, and this is a key question I think most farmers would be asking — what's in it for me, you know? How's this going to make things better, by investing more money?
Kevin Forward — Head of Traceability, OSPRI
So as a farmer, what you'll get is a NAIT replacement system that's easier to use, and aligns more with how you do things on farm.
You'll continue to get the support from our regional people. So helping you to understand what your NAIT obligations are, how you can complete them, and that avoids those fines and prosecutions.
James Parsons — Farmer and OSPRI Board Member
Down on the ground, what does it mean for a farmer in terms of extra cost? Let's say across a line of cattle that you might be sending to the works.
Kevin Forward — Head of Traceability, OSPRI
So if you were sending say 20 cattle to the works, you'd pay about an extra $25 in slaughter levies. If you were buying say a bag of 50 tags, that's about an extra $22 extra in levies on top of those tags.
Narrator
If you want to hear more about the proposal or to ask any questions, you can go to the OSPRI website [www.ospri.co.nz/nait-levy-consultation] where you'll find a list of events that you can attend.
To make a submission, go to the OSPRI website and click on the link [Submissions portal — NAIT Limited consultation: Proposal for changes to levies].
NAIT levies consultation
In 2022, we invited feedback on our proposed increase to NAIT levies. Consultation has closed.
Background
A strong traceability scheme means the farming sector can get back to business sooner if there is a biosecurity threat, food safety concern or market access issue.
NAIT Limited has been working hard with our shareholders and stakeholders to stabilise the system following feedback from farmers and industry that the system is difficult to use and did not perform in the event of a disease outbreak.
The Mycoplasma bovis (M bovis) outbreak in 2017 highlighted serious concerns with NAIT, with considerable costs incurred by industry and government as a result of the need to manually trace livestock.
Work to strengthen the NAIT scheme so far has largely been funded from NAIT reserves built up from previous years’ unspent NAIT levies, that are now depleted.
An increase in funding is needed so we can continue to deliver this work.
Proposed levy increases
To help us continue improving the NAIT system, we propose increasing:
- the NAIT tag levy from $0.90 to $1.35 per tag
- the NAIT slaughter levy from $0.50 to $1.77 per animal
- deer industry and Crown contributions to maintain the 35%/65% Crown/industry funding model.
We believe the increases above are the minimum needed to deliver a traceability system that's easy to use, and able to perform in a disease outbreak.
We will review the funding requirements and levy rates every three years to ensure levy settings remain appropriate and proportionate to the benefits received.
Consultation submissions — analysis and themes
We received a total of 147 submissions from:
- individual farmers/farming operations
- primary sector groups
- shareholders
- funders
- collection agents
- OSPRI committees.
These submissions ranged in opinion, were complex, and required extensive analysis and discussion.
Main themes that emerged from consultation submissions were:
- that NAIT Ltd should be held to account for delivering a system that is user-friendly, fit for purpose and performs in the event of a disease outbreak
- that the Crown should maintain or increase their 35% contribution
- that the NAIT funding model (including the proportional split between tag and slaughter levies) needs to be reviewed
- that farmers are feeling frustrated about compounding costs and regulations impeding operations and profitability
- reluctant support once stakeholders had reviewed the information about the proposal
- general frustration with the current NAIT system and lack of trust in the ability of NAIT Limited to deliver a better system
- poor performance of NAIT tags and the need to address this if tag levies were to increase.
Consultation outcome
After careful consideration of submissions, the Board of NAIT Limited approved an increase in NAIT levies below what was proposed.
From 1 July 2022 the:
- tag levy will increase from $0.90 to $0.97 (consultation proposal was $1.35)
- slaughter levy will increase from $0.50 to $1.49 (consultation proposal was $1.77).
These new cattle levy rates align with the agreed dairy/beef industry split.
Yearly contributions from the:
- Crown will increase from $2.14m to $4.34m
- deer industry will increase from $120,000 to $249,000.
Downloads
NAIT consultation document: Proposal for changes to levies
PDF 769 KB
NAIT levy proposal consultation summary
PDF 136 KB
NAIT levies consultation: Schedule of events
PDF 125 KB
How the traceability system is currently funded
PDF 113 KB
Cost recovery principles
PDF 117 KB