Live Export

CDFC pays $1m to owners of cattle stranded by livex ban

James Nason, 25/11/2011

The Cattle Disease Contingency Fund has paid more than $1 million to the owners of 11,000 cattle that were stranded in northern export yards when the Federal Government banned live exports to Indonesia earlier this year.

The payments follow the tentative resolution of concerns between the board responsible for the fund and the Australian Live Exporters Council over the question of whether assistance paid to exporters should be reimbursed.

The board of the CDFC made $5m available during the ban to assist the owners of cattle caught in transit to cover the costs of feeding, holding and managing them.

The CDCF is a $20m emergency fund raised from producer levies to assist with the costs of dealing with animal health, disease and welfare crises.

The decision to fund assistance payments from the CDFC was seen at the time as win-win solution to a tense stand-off that had developed between agriculture minister Joe Ludwig and Meat and Livestock Australia over compensation for affected cattle owners.

Senator Ludwig’s view was that the industry was responsible for the animal welfare lapses that prompted the ban and therefore should shoulder some of the costs of compensation. He publicly ordered MLA to release $5m from its levy reserves to help pay for the welfare of cattle stranded by the ban.

MLA resisted, arguing that its constitution did not allow levy-generated funds to be released for that purpose.

As the standoff intensified, industry leaders turned to the board of trustees of the CDFC to determine whether its funds could be used instead. The board agreed that the circumstances constituted an animal welfare crisis and that funds could be released for the specific purpose of assisting with the costs of feeding stranded cattle, moving them to the nearest market, and administering any animal health and biosecurity treatments required.

The money was pledged, the impasse between Canberra and MLA was resolved and the next day the Federal Government unveiled a $30 million assistance package of its own to help producers and other businesses directly affected by the ban.

And that was that, or at least it was until applications for funding were received and processed by the CDFC board.

The board received eight separate applications for assistance, amounting to a collective total of $1.16 million.

Five of the applications came from exporting companies, who owned most of the cattle caught in transit at the point of the ban. Individually some exporters spent hundreds of thousands of dollars feeding and holding cattle during the two-month closure of the Indonesian trade.

This issue became a key point of contention, as some producer leaders behind the scenes questioned whether funds generated by producer levies, and not contributed to by exporters, should be paid to exporters.

The CDFC board wrote to the Australian Live Exporters Council in October to advise that it had processed and approved each application. However, before the money was paid, it wanted advice as to whether the export industry was intending to reimburse the funds over time.

When the funds were initially pledged, they were offered to the owners of cattle stranded by the ban, which included exporters. However CDFC chairman Paul Saward said it was always the board’s intention that it would seek a commitment from the export industry to return some or all of the funds paid to exporters for that purpose.

The Australian Live Exporters Council has since written to the CDFC board thanking it for putting forward the assistance, and requesting it to pay the funds approved to exporters.

In the meantime, ALEC chief executive officer Lach MacKinnon told Beef Central the council was working on developing a funding mechanism that will be used to facilitate export industry contributions to the fund in future.

It is understood the move is not intended as a repayment of the funds paid to exporters as compensation, but rather as a commitment by the export industry to make ongoing contributions to the fund from this point forward.

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