Sheepmeat and beef levies to continue

Sheepmeat and beef levies to continue – defeat for wool and goatmeat

Sheep and beef farmers have voted to continue their investment in sheepmeat and beef activities through Meat & Wool New Zealand, but they have not supported the continuation of a wool or goatmeat levy.

Meat & Wool New Zealand Chairman, Mike Petersen said the referendum result now sets the direction of the organisation for the next five years.

“The referendum process has been thorough and extremely useful for Meat & Wool New Zealand and farmers to examine the activity areas and levy streams for the next five years. On the back of three tough years for sheep and beef farmers, this was always going to be a challenge. The vote itself has sent a clear message to Meat & Wool New Zealand that there is a significant amount of dissatisfaction with past investments and we need to do better.”

Under the Commodity Levies Act 1990 (CLA), each levy proposal must pass on both a one farmer one vote test, and also on a weighted or stock unit test. All of the levy streams passed on a weighted basis, but the wool and goatmeat levies were defeated on a one farmer one vote test.

“In spite of all levies gaining support on a weighted basis, the CLA does not allow an application to be made if one of the tests fails. The Minister of Agriculture, Hon David Carter, has no discretion under the Act, and therefore we will be proceeding with an application for sheepmeat and beef levy orders only.”

The lack of support for the wool levy removes funded activities of $6.4 million from the projected $30 million income in the 2010/11 year. Additionally there is the loss of approximately $5million that is leveraged from other funding sources for these activities. The goatmeat slaughter levy would have provided $58,000 and the removal of both levies will require a restructure of Meat & Wool New Zealand.

“We absolutely respect the democratic process and the right for farmers to decide on investing in their industry for the next five years. When the board meets this week, we will be looking across all current and planned activity areas to consider the implications of no wool or goatmeat levy going forward.

“There will be implications for wool levy funded activities in particular. The wool levy proposal was a reduction in funding initially to 4c and then 3c per kg in 2012 that was restricted to core activities directly benefitting farmers. These included on farm research, monitor farms and extension, shearer and wool handling training, Sheep Improvement Ltd (SIL), and the collection and provision of information relating to the wool industry by the Meat & Wool New Zealand Economic Service. In spite of this reduction the wool levy failed to get support and we will respond accordingly.”

Mr Petersen said that throughout the referendum process a number of people questioned the stance from Meat & Wool New Zealand that “no” means no, and suggesting that there would be new proposals presented to farmers in this eventuality.

“We made it very clear right through the referendum process that under the CLA the vote was for the levy in its entirety, and a “no” vote would mean the levy proposal would stop all investment in that area. Many suggested this stance was a ploy to try and convince people to vote yes, but this is simply the reality of life under the CLA”.

Mr Petersen said a clear message from farmers during the consultation was the need for Meat & Wool New Zealand to be more focused and the referendum result does provide that opportunity.

“We have received solid support for the continuation of sheepmeat and beef levies and we are looking forward to moving ahead as an organisation that has relevance and provides value for New Zealand sheep and beef farmers.”

“We have an opportunity to draw a line under the past and ensure we are more accountable and focused in the future. At the end of the day, farmers have given their support for a sheepmeat and beef levy on both a single farmer and weighted stock basis and it’s up to us to get on and make that investment work for them.”

Mr Petersen said he had notified the Minister of Agriculture of the results and the next step would be preparing the application for new sheepmeat and beef levy orders. The current levy orders for sheepmeat, beef, goatmeat and wool are in place until April 2010.

Voting results from the Returning Officer, Warwick Lampp at electionz.com are:-

ENDS

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