NEW South Wales Government officials have ruled out an electronic tag subsidy for sheep goats, instead backing a national tag tender to minimize costs in a mandatory EID rollout.
At the recent Broken Hill EID information session, NSW Department of Primary Industries group director livestock systems Dougal Gordon said the biggest upfront costs of a mandatory system would be met by saleyards, but the greatest costs over time would be borne by producers.
He said the initial government position at this stage is not supportive of subsidies.
“Subsidies like quotas, they’re quite distortionary in their impact and can lead to unintended consequences – that’s the fundamental economic position.”
He conceded that Victoria had subsidies in position for EID ear tags.
“That’s funded by producers; however, through a levy and so when do you stop that levy, when do you actually stop that subsidy, there is a whole range of complications associated with that.
“So we are supportive of a national tag tender to try and reduce those costs for a competitive market place approach,” he said.
“That’s what our position is and we are hoping we can maximise the downward pressure on (tag) prices through that competitive market mechanism. “
Minister for Agriculture Dugald Saunders said Victorian producers got a tag subsidy funded by a levy “because they implemented in seven months.”
“We’re talking about, depending on what we are doing, up to four years.
“So it‘s a longer timeframe.”
Under pressure from the Victorian Farmers Federation, the Victorian Government in 2016 announced it would provide an initial $7.7 million subsidy to make EID tags ‘cost-neutral’ for producers at a price of 35 cents.
The initial tag price subsidy was part of a $17 million package to support the introduction of electronic identification technology across the supply chain. Approved sheep and goat EID tags continue to be subsidised in Victoria, but using funds generated by carcase duties, from the Sheep and Goat Compensation Fund.
Saunders assures producers EID tags will not cost $2
Mr Saunders said the EID tag cost under a national tender would not be $2.
“There’s no way it will be $2.
“It is now, I get that, but it won’t be, and the other thing we wanted to do is provide funding of some sort and it’s the feedback we need from you on the best sort of way to support you in what you are doing,” he said.
“I get tags is the number one thing, but there is other support for all the other infrastructure you might want to have.
“We are working on a funding program right now, but I don’t have that detail for you today,” Mr Saunders said.
He said Victorians are paying for their own tag subsidy.
“So that’s not something we think is the best idea.
“We think that a national tag tender to bring the competitive price down will be the starting point and then everything else that we can do with a range of grants, that’s what we are looking at doing to support producers.
“But we’ll have more details on that to come.”