Wednesday, April 24, 2024

Levy rise okay likely

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After hearing from farmers Beef + Lamb New Zealand intends taking a month before deciding on increases in the sheep and cattle levies to raise a further $4 million annually. The consultation with farmers finished on Friday.
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“Along with receiving a good number of submissions we’ve had great and robust discussions with farmers at our nearly 50 events around the country over the past five weeks,” chief executive Sam McIvor said.

“Many farmers took the time to provide us with detailed feedback in their submissions, which will be very valuable going forward, in addition to the specific levy proposal itself. 

“Over the course of the next two weeks we will be reviewing what farmers have told us. 

“The board will then make a decision in early August and we expect to advise farmers of the outcome by the middle of the month.”

B+LNZ proposes to increase the sheep meat slaughter levy by 10c from 60c to 70c a head and the cattle levy by 80c from $4.40 to $5.20 a head.

Both higher amounts are within the range approved by farmers in the last levy referendum three years ago in 2015.

Under the Commodities Levy Act referendums of farmers have to be held every six years so the proposed increase comes halfway through the levy period.

The added cost will be $260 annually to the average sheep and beef farmer and $55 to the average dairy farmer.

The Mycoplasma bovis response levy will be separate and has not yet been decided in talks with DairyNZ, McIvor told the sheep and beef farmer consultation meetings.

B+LNZ proposes to spend two-thirds of the added money on its Taste Pure Nature meat promotion by rolling it out in two key markets – Shanghai, China, and a selection of United States cities to be determined in talks with the meat companies.

The total origin brand spending will be $9m annually, including developing brand assets that will be used by all NZ exporters in all markets.

Before going to farmers with the increased levy proposal B+LNZ reprioritised and reallocated its spending, saved $4m by closing overseas offices and reduced the old market maintenance activity.

It then spent $1.3m developing the new Taste Pure Nature origin brand and $2.1m boosting its environmental capability. 

From the $4m new levy funds it also wants to allocate another $800,000 into its environmental work, making that expenditure $4.5m a year.

B+LNZ is working through an environmental strategy 2018-2022 for improvement of fresh water, towards carbon neutral farming by 2050, promoting biodiversity and protecting native species and improving soil health, carbon content and productivity while minimising soil loss.

Spending on biosecurity is to nearly double, from $300,000 to $550,000 a year to fix Nait and develop an electronic Animal Status Declaration and improve the scanning for future risks.

Additional spending of $350,000 a year will be directed at independent research on the public perceptions of the sheep and beef industry and ways of influencing that image.

Given the 85% farmer approval in 2015 of the upper limits of levies (75c for sheep and $5.50 for cattle) it seems likely the proposed levy increases will be enacted by the board after consultation.

Northland farmers at the final consultation meeting said the high prices for lamb and beef provide the opportunity for more spending on promoting NZ’s premium red meats and developing some market initiatives.

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