New Zealand sheep meat and beef levies to continue

by Bryan Salvage
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WELLINGTON, N.Z. — Although sheep and beef farmers voted to continue their investment in sheep meat and beef promotions through Meat & Wool New Zealand, they did not support continuing a wool or goat-meat levy. The referendum results will now set the direction of the organization for the next five years, said Mike Petersen, Meat & Wool New Zealand chairman.

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, he said. "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," he added.

Each levy proposal must pass on both a one-farmer, one-vote test, and also on a weighted or stock-unit test, according to the Commodity Levies Act 1990. All of the levy streams passed on a weighted basis, but the wool and goat meat levies were defeated on a one-farmer, one-vote test.

"In spite of all levies gaining support on a weighted basis, the C.L.A. does not allow an application to be made if one of the tests fails," Mr. Petersen said. "The Minister of Agriculture, Hon. David Carter, has no discretion under the Act, and therefore we will be proceeding with an application for sheep meat and beef levy orders only."

Lack of support for the wool levy removes funded activities of NZ$6.4 million (US$5.4 million) from the projected NZ$30 million (US$25.4 million) income in the 2010-11 year. In addition, there is the loss of approximately NZ$5 million (US$4.2 million) that is leveraged from other funding sources for these activities. The goat meat slaughter levy would have provided NZ$58,000 (US$49,000) 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," Mr. Petersen said. "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 goat meat levy going forward. We have received solid support for the continuation of sheep meat and beef levies and we are looking forward to moving ahead as an organization that has relevance and provides value for New Zealand sheep and beef farmers."

The current levy orders for sheep meat, beef, goat meat and wool are in place until April 2010.

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