Government's $45m M. bovis bill

The state has received 724 claims, expects about 600 to 700 more claims and could pay out about $120 million in compensation.

Ministry of Primary Industries (MPI) manager compensation Angela Brownie, who took on the role eight months ago, told the Federated Farmers dairy council meeting in New Plymouth last week that her team is now dealing more efficiently with claims. The team includes 45 lawyers and accountants.

She says 70% of claims received so far have been dealt with; the average time spent on processing a claim has dropped from 80 working days 12 months ago to 25 working days during the last four months.

“We have put in place better processes,” she concedes.

Brownie says processing claims can be complex depending on the level of information provided by the farmer and the types of claims associated with each farm. 

Claims associated with milk loss can vary depending on whether there are sharemilkers or contract milkers or whether it is a single-owner farm. Compensation for loss of milk production is based on kgMS production onfarm over the last few seasons, milk price and farm production costs.

Brownie says only 11 claims have so far been declined. “We are not in the business of not paying people,” she says.

To help cashflow on affected farms, MPI is now introducing earlier partial payments for culled animals with a final wash-up payment after the last animal has been culled; partial monthly payment for milk loss is also available to affected farmers.

“This is to ensure that income is coming in to help with cashflow on the farm,” says Brownie.

So far 40,000 animals have been culled; the Government’s early estimate was a cull of up to 150,000.

“If there are delays, then it’s not about frustrating anyone or denying payments; we may not have all the information we need.”

Brownie urged farmers still frustrated with their M. bovis compensation claims to directly contact her at MPI.

Feds dairy chairman Chris Lewis says the organisation has been contacted by farmers having issues with their M. bovis claims. But he says things are improving.

“It’s clear that two years ago MPI had no idea how to deal with the M. bovis claims.”

Lewis questions whether the Biosecurity Act is geared up to efficiently process compensation payments. “Is the legislation fit for purpose? Legislators must ensure that legislation is able to meet all challenges and all issues.”