No extra aid from national fund for BJD-hit producers

James Nason, 18/10/2013

The trustees of the Cattle Disease Contingency Fund say income constraints have forced them to knock back a request for funding to help northern producers impacted by Bovine Johne’s Disease control programs.

The CDCF is an industry fund which was developed in the 1990s to help the industry in times of animal health or disease crisis.

It is managed by a board of trustees appointed by Animal Health Australia, Cattle Council of Australia and the Australian Lot Feeders Association.

Fund chairman Paul Saward, who also sits on the board of Cattle Council of Australia, said that while the CDCF trustees have some flexibility as to how the funds can be used, they are under a Government-imposed directive to keep the fund within a 10pc range of $20 million, or within $18 to $22m.

In the past the fund has been sustained through income earned from interest and by the diversion of around two cents from the $5/head compulsory transaction levy paid by producers on the sale of cattle.

However, the funding streams that have previously supported the fund have since all but dried up he said.

Several years ago when the fund looked like it could blow out above the $22 million upper scale, industry representative groups made a decision to suspend further levy payments into the fund.

Falling interest rates in recent years had also meant the fund was no longer able to sustain itself.

Mr Saward said the trustees also made a number of recent funding commitments that had reduced the fund to the lower end of its directed range.

This included the recent commitment to fund the Livestock Biosecurity Network for three years and a renewed commitment at the last CDFC meeting to continue funding for the National BJD Financial and Non Financial Assistance Package for next three years.

Under the package property owners caught up in BJD control programs can access $11,000 including GST to help meet the costs of testing to resolve their BJD status, and can also access fully-funded BJD counsellors.

The trustees had also paid out over a million dollars in mid-2011 to help the owners of cattle that were caught up in holding yards during the Indonesian export suspension. The funding was offered by the committee to resolve a stalemate between the Federal Government and Meat & Livestock Australia over who should cover the costs of feeding and holding the 11,000 cattle that were left stranded in export yards as a result of the Government’s ban.

Most of the cattle were by that point owned by live export companies, which had not actually contributed to the development of the Cattle Disease Contingency Fund, which was originally generated from producer-owned funds and levies.

After paying out the money to resolve the short-term crisis, which in turn helped to kick start the flow of Federal assistance funding, the CDFC trustees then asked the Australian Livestock Exporters Council to work out a plan to have export companies repay the funds at a later date. It is understood that an agreement has since been reached that will see exporters make contributions to the fund in future, but to date that has yet to happen.

The upshot, according to Mr Saward, is that the CDCF is not currently in a financial position to support the funding of any new proposals.

In August a submission was sent to Cattle Council of Australia by groups representing producers affected by the BJD trace-forward program in Queensland, the Northern Territory and Western Australia calling funds be released from the Cattle Disease Contingency Fund to increase the level of financial assistance available to affected producers.

The Cattle Council in turn sent the request onto the board of the CDCF in mid-September, but as of this week was yet to receive a formal reply.

However when contacted by Beef Central today Mr Saward confirmed that the trustees havedecided that the request cannot be supported due to the fund’s current financial position and ongoing commitments.

“We have reviewed our budget taking into account our current commitments and our projected income over the next three years, and a levy redirection would be needed to enable us to fund any new proposals,” Mr Saward said.

“We were given a directive by Government during the Howard era, and as trustees of the fund we cannot wantonly or deliberately go outside that directive and knowingly push the fund way below the range that has been set.

“Until someone gives us a new directive, that is where we’re at.”

He said that had the fund been in a stronger financial position the result may have been different.


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