Lamb Production

How will Victoria’s Government supply ‘cost neutral’ electronic sheep and goat tags?

Terry Sim, August 31, 2016
Victorian Minister for Agriculture Jaala Pulford has promised Victorian farmers 'cost neutral' electronic sheep tags.

Victorian Minister for Agriculture Jaala Pulford has promised Victorian farmers ‘cost neutral’ electronic sheep tags.

SHEEP ear tag suppliers have concerns about the Victorian Government’s ability to ensure prices are equitably cost neutral in the lead-up to the mandatory electronic identification of stock born after January 1 2017.

Minister for Agriculture Jaala Pulford has negotiated with the Victorian Farmers Federation that the price of electronic tags to farmers in the first year will be “cost neutral” – around the same price as visual tags at about 40 cents each.

However, the subsidised tag prices through Agriculture Victoria’s online service currently range from 77 cents to around $1.50.

The tags and prices supplied by the AV online service include Leader’s multitronic one piece tag 77 cents and Leadertronic two piece tag 90 cents; Shearwell’s sheep tag 80 cents; Zee Tags FET sheep tag 80 cents; Allflex’s RapID tag 89 cents, the two piece tag $1.06 and Enduro’s Combo 2 tag $1.52.

Tag suppliers believe it needs to be clarified as to how the range of different tag prices could be equalised by the government down to about 40 cents and how many tags might be needed.

If the same 37-40 cent price cut was applied to all the tags currently sold online, it might mean only one or a few tags would be available at the “cost neutral” price. Alternatively, reducing the cost of all tags back to a visual tag price for the first year might also undermine the market advantage of the lower price tags sold via the online service.

A bigger subsidy would be required to bring the price of tags that are around $1-$1.50 down to 40 cents than to bring the 77-80 cent tags back to about 40 cents.

Suppliers also doubted if any producers would buy visual or electronic tags before tags were made available at the “cost neutral” price. Producers might also try to buy several years’ supply of EID tags at the “cost neutral” price and there could be complications at saleyards with EID and visually tagged sheep being received at the same time and in the same line.

It is estimated 12-14 million lambs would be born in Victoria next year, but if producers ordered extra electronic tags for older sheep, the demand could be more than tag suppliers could manufacture in the short term. When EID cattle tagging was made mandatory there were tag shortages which held up the sale of cattle.

A spokesman for Ms Pulford said there were on-going discussions with the industry to deliver cost neutral tags in the first year. This issue of differing electronic tag prices will be one of the many discussed over the next 4-5 weeks, he said.

Agriculture Victoria is also having discussions with tag suppliers to confirm that supplies will meet the expected demand. The Minister’s Sheep and Goat Identification Advisory Committee will also provide advice on tags to ensure an appropriate outcome, the spokesman said.

Victoria will ask other state governments to participate in a national tender for electronic sheep and goat tags in November this year to continue to ensure competitively tag prices for Victorian sheep and goat producers.

Agriculture Victoria already retails the cheapest electronic NLIS tags in Australia, thanks to this competitive tendering approach, the spokesman said.

“Increased demand for tags is likely to drive the prices of approved electronic sheep tags even lower.

“The minister will invite other states to join that tender as part of the process.”

The spokesman said no formal advice had been received from other states in reaction to the Victorian Government decision to require all sheep and goats born after January 1 to be electronically tagged.

The spokesman said Agriculture Victoria is not considering allowing farmers in other states to buy tags from the Victorian online service at an unsubsidised price.

 

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Comments

  1. Bruce Dumbrell, September 1, 2016

    Andy Madigan: Re your question on cattle tag prices – have they come down? The answer is yes — considerably — through competition and tag developments.
    I would ask, could saleyards run cattle now without systems implemented by NLIS implementation? I’m not sure. What do you think?

  2. Michael Craig, September 1, 2016

    Currently tags are not subsidised by Victoria’s sheep and goat compensation fund.

  3. Craig Hinchliffe, August 31, 2016

    The electronic tag discussion would be better served if the benefits to producers, as opposed to the industry regulators, were better articulated. In a scenario where it was mandatory for producers to use electronic tags on all livestock sold over the hooks for example, kill sheet feedback to producers featuring individual carcase electronic tag data could create significant value for subsequent genetic selection. I have also heard it mentioned that producers would have more confidence in ‘over the hook’ sales if they were paid according to the meat yield of individual animals and thus not able to question any perceived anomalies.
    Like in any change campaign, the critical issue is to communicate the benefits for those footing the bill. If an initiative is to benefit everyone in the industry supply chain — from the ‘farm gate to the kitchen plate’ — then everyone in that chain needs to make a proportional contribution. However, at the moment, the benefits to be derived by producers remain at best ambiguous. Call me cynical, but there currently seems to be a fair bit of advocacy dressed up as analysis in the press on this issue. I remain uncertain as to specific measurable benefits being targeted through this approach and how the cost-benefit analysis will be measured and determined. Why can’t the extensive levies already being paid by producers be used for a time-limited, state-wide trial to determine whether electronic tags are the panacea to the supply chain traceability issues highlighted?

  4. Andy Madigan, August 31, 2016

    Have cattle tag prices come down since electronic identification was implemented? The cracks are already starting to appear in this rash decision. The same mistakes are going to be made as were made in the cattle implementation. Have they not learnt anything down south? Slow down, test it and trial it, don’t race in and expect others to try to make it work. I think the tags are being subsidised by the producers’ own funds they pay to the Victorian Government through the compensation fund. I may be wrong, just guessing?

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