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Aussie disease levy: the deal is done

March 4, 2011

By Neil Clarkson

Australia's horse owners are now under the national scheme guaranteeing a federal response to any future disease incursions.

The 2007 outbreak of equine influenza cost hundreds of millions of dollars to contain and eradicate, with federal authorities saying afterwards they could not guarantee any similar future response unless the industry signed up to the Emergency Animal Disease Response Agreement (EADRA).

EADRA provides the framework for the federal government to impose a levy on an industry to recover the costs of fighting and containing disease incursions.

The government had signalled that without a deal, it was considering allowing voluntary vaccinations of horses against equine influenza, a move supported by the thoroughbred sector, which was determined to minimise the impact of any further incursions.

Horse industry groups began talks to agree on a levy framework, and proposals were put to the federal government just before a December deadline.

A deal was agreed and this week the Australian Racing Board, Harness Racing Australia, the Australian Horse Industry Council and Equestrian Australia signed up to the agreement, as representatives of the racing, performance and recreation sectors.

Negotiations over the form that the levy would take were co-ordinated by Animal Health Australia. In the end, it was agreed the levy would take the form of a 50-cent addition to the cost of manufactured feed and wormers.

Under the EADRA arrangement, it will be imposed only after an actual disease emergency, when the response is finished. The industry will have 10 years to repay the cost to the government.

The leaders of the four sectors, in a joint statement last month, said: "This has been a long journey ... this historic and unprecedented agreement does demonstrate how important the health and welfare of their animals are to all horse owners.

"The 2007 equine influenza outbreak showed how an exotic disease incursion can have widespread consequences for all sectors of the horse industry. This agreement is an important step in providing a greater level of protection and certainty for all horses and their owners."

The chief executive of Animal Health Australia, Dr Mike Bond, acknowledged the efforts of the four horse industry organisations, together with many representatives of the key recreational sectors to reach consensus.

"The Australian horse-owning community is very diverse and communications are often difficult - especially at a grass-roots level," he said.

"Many people in dozens of organisations have worked hard to ensure that there was effective consultation with their members. This was a crucial part of the submission that was made to the Commonwealth Government on behalf of industry by Animal Health Australia."

Not everyone is happy with the deal, however.

The Stock Feed Manufacturers' Council of Australia has spoken against the levy being on manufactured feed.

Executive officer John Spragg has predicted a levy on manufactured horse feeds would result in loss of sales for feed suppliers.

"This is an inequitable levy, which in effect will be tax on horse-feed manufacturers," Spragg said.

"While feed mills will be required to submit the levy to the government, there will be no requirement for levy collection on chaff, grains and other raw materials that are sold through resellers to the horse industry."

As the levy proposal included only manufactured horse feed rather than all horse feed, the association believed the levey would be anti-competitive and may be in breach of trade-practice regulations.

"It is illogical to apply the levy based upon whether feed sold to horses has or has not been manufactured," Spragg said. "This is a levy on manufacturers and produce stores, not a levy on the horse industry.

"Horse feed and wormer manufacturers sell products to wholesalers and resellers. These are the clients that will have to pay the levy. The horse owner is well removed from where in the supply chain the levy will be applied."

Spragg said the horse industry must take responsibility for collecting the levy, rather than trying to "push the responsibility up the supply chain to manufacturers".

"The levy must be applied through direct collection from horse owners. As horse feeds are largely based upon grains, it can be argued that the proposed levy on horse feed is in effect a levy on the feed and grains industry rather than a levy on the horse industry."



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