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.

Overview of the NAIT levy increase proposal​

1:05

Read transcript for this video
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 webinar 2

25:30

Read transcript for this video
We are preparing a transcript for this video. Thank you for your patience.

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.

Watch

What will a dairy farmer get from an increase in NAIT levies?​

00:44

Read transcript for this video
James Parsons — Farmer and OSPRI Board Member
So Kevin, I've got a lot of dairy farming colleagues and friends. What's in it for them in terms of this levy change that's proposed?

Kevin Forward — Head of Traceability, OSPRI
Look for dairy farmers, they're probably using software like MINDA or myHERD. With the new NAIT database, it means that they'll be designed to be able to talk together a lot better than what the current systems do. That means that that reduces the risk for fines and prosecutions
if they're entering their data correctly. They only need to enter it once. And it also means that when we have a disease outbreak, we can respond really quickly and get on top of it.

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].

What will a beef farmer get from an increase in NAIT levies?​

1:05

Read transcript for this video
James Parsons — Farmer and OSPRI Board Member
So Kevin, as a beef farmer, NAIT levy increases are proposed. What's additional that as farmers we get, that we won't get if there's no change in the levies?

Kevin Forward — Head of Traceability, OSPRI
Beef farmers will end up with a new NAIT database, which makes it easier for them to meet their obligations, and it will align more with what's on farm, in regards to the way that it operates. That's going to make it easier for farmers to meet their obligations and avoid those fines and prosecutions. It's going to enable us to do some additional research around tag design and technology, potentially UHF, looking at automating animal movements, and it's going to enable us to look at the regulatory settings, particularly around animal registrations. A lot of farmers are saying it's too difficult to register animals, so this will enable us to commit some resources to make sure that we can make sure we've got the settings right, we're only capturing the minimum information, and we make that easier for farmers to comply.

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].

What will a deer farmer get from an increase in NAIT levies?​

1:02

Read transcript for this video
James Parsons — Farmer and OSPRI Board Member
So the deer industry are important contributors to the NAIT system as well. So what's in it for them in terms of what's proposed here?

Kevin Forward — Head of Traceability, OSPRI
So a lot of what we've heard back from deer farmers is around the tags and the technology. So with this additional funding, that enables us to look at tag technology, particularly around UHF technology, which is emerging as a viable livestock tracing tech.

James Parsons — Farmer and OSPRI Board Member
So that’s ultra-high frequency?

Kevin Forward — Head of Traceability, OSPRI
That’s ultra-high frequency. That's really important if you want to catch animals that move quite quickly. It's a lot more rapid than the low frequency. But that whole speed of reading — being able to scan it at a distance — enables easier automation of movements. So it's a really attractive technology. And then also looking at around the design of the tags for deer. They obviously have different farming systems to what cattle do. So making sure we've got the right design, the right tag and the right technology.

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].

What will a lifestyler get from an increase in NAIT levies?​

00:50

Read transcript for this video
James Parsons — Farmer and OSPRI Board Member
So, every traceability system is only as strong as its weakest link. For the lifestyle farmers — there’s lots of them — what's the benefits there for that sector?

Kevin Forward — Head of Traceability, OSPRI
The key thing for lifestylers is around making sure that the NAIT database, that’s easy to use. So ease of use is that key feature. And then also making sure we've got the outreach programme to be able to get out and educate them.

Livestock diseases don't discriminate between a commercial animal or a non-commercial animal. And you don't need to move animals to be able to spread disease, you know, infected wildlife. So it's really important that lifestylers understand that and that we are able to be
out there engaging with them.

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].