A NATION-WIDE outbreak of foot and mouth disease (FMD) could strip more than $50 billion from Australia's livestock industry over 10 years, according to a new costing model from the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).
This is substantially higher than the Productivity Council's revised estimate of $16b worth of losses in a 10-year period in 2011.
Acting ABARES executive director Dr Kim Ritman said an FMD outbreak would affect the beef, lamb, wool and dairy industries and could prevent Australian exporters trading in their major markets for several years.
"All red meat, live animals and livestock product exports to most major trading partners would stop until the disease was eradicated and market access could be renegotiated," he said.
According to the ABARES report, even a relatively contained FMD outbreak in the Goulburn Valley could cost about $6.2b in the 10 years following.
The report had investigated FMD outbreaks in Japan, the UK and South Korea, and said the $30b estimated increase in potential economic damage was due to export markets taking longer to recover than previously thought.
The report assessed the economic and social impacts an outbreak would have on livestock producers, and said that while a nation-wide outbreak could be devastating, if a small outbreak was quickly identified, the harm done to the export market could be minimised.
The report was a good reminder for Australia to be proactive about biosecurity, Australia's chief veterinary officer Dr Mark Schipp said.
"We have stringent controls at the border and we do quite a lot of work with our near neighbours in South East Asia to minimise the risk of it getting in," Dr Schipp said.
* ELECTRONIC TAGGING DEBATE CONTINUES
AUSTRALIA has remained foot and mouth disease (FMD)-free for more than 130 years but its potential to devastate the livestock industry has reignited debate about the enforced electronic tagging of all sheep and goats in the country.
While cattle moving from their birth property must have RFID tags, movements of sheep are still recorded using the paper-based mob-tracing system.
Following the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) study's release last week, Victorian Agriculture Minister Peter Walsh said the best course of action would be a national approach to scrapping the current system for electronic tags.
"Victoria's preference is for a nationally uniform arrangement, but if consensus cannot be achieved, we are committed to taking action in our State to address the serious flaws in the current system in order to protect our multi-billion-dollar livestock industries," Mr Walsh said.
"Maintaining the status quo is simply not an option."
Mr Walsh also highlighted productivity gains that could be made from farmers using the RFID system in both the wool and prime lamb industries.
ABARES has also released a regulatory impact statement (RIS) for consultation with stakeholders who will be affected by changes to the NLIS for sheep and goats.
Three possibilities to improve the NLIS are outlined in the RIS, which will be open for submission until December 6.
Two options involve bolstering the existing paper-based system with stricter auditing process and electronically tagging sheep that will go through the saleyard system, with costings estimated between $10 million and $19m a year.
The third option tabled is to introduce a mandatory RFID tagging system at an estimated cost of $25m-$45m a year.
But the prospect of imposing the additional tag costs on farmers has met with some resistance.
Victorian Farmers Federation (VFF) livestock president Ian Feldtmann said many in the sheep producing community were still unconvinced about the necessity of abandoning the mob-tracing system.
"At the end of the day we do need traceability to be prepared for exotic disease outbreaks such as FMD but any system has to be cost-effective and practical," Mr Feldtmann said.
"Our current policy is to support voluntary use of RFID in the sheep industry.
"The VFF has received numerous calls and emails from members vigorously opposed to mandatory RFID of sheep and goats.
"Most argue the cost is too high and it delivers little value."
A standard electronic tag retails at about $2.50 but the State Government subsidy reduces the price to 90 cents, compared to 30c for a plastic tag.
For every 500 head tagged, the cost of RFID tags is about $300 more.
Nathan Scott, an agricultural advisor with Mike Stephens & Associates, said after running information sessions for farmers on RFID tags for several years his feedback about productivity had been positive.
"We work with a range of Merino and prime lamb producers and there's been growing interest over time, especially as we've had improvements in equipment," Mr Scott said.
"The biggest thing for farmers is the productivity gains they see."
But for farmers, getting over the price hurdle isn't the only problem with the RFID system, according to Wool Producers Australia (WPA) policy spokeswoman Jo Hall, who said using the tags in a practical scenario could pose problems.
"In terms of a practical uptake, if you're at a saleyard, what happens if you get one misread or there's one animal without a tag - do you run the whole mob through again to find which one it is?" Ms Hall said.
"We support farmers who use electronic tags ... but we don't see the benefits of electronic tags being great enough to impose mandatory uptake on the whole industry."
The Sheep Meat Council of Australia also supported the current mob-based tracking system but would be discussing the matter further at its AGM in November, a spokeswoman said.
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