How much support do dairy farmers deserve?

6 June 2018

The Government announced last week that over 150,000 cattle will be culled to eradicate mycoplasma bovis from New Zealand.

The disease has been called the most severe economic biosecurity issue to hit New Zealand. It is clearly a real threat to dairy which is the backbone of New Zealand's economy.

The disease causes illness in cattle including udder infections, mastitis, abortion, pneumonia and arthritis. Most major dairy countries in the OECD have the disease and none of them have successfully eradicated it.

The disease does not present a significant risk to humans. Only two people in the world are reported to have contracted it. There is no increased risk to food safety. However, the disease does present a significant risk to the jobs of the 7 per cent of workers in New Zealand employed in the agricultural sector.

The threat the disease poses is significant but must be viewed in the right context.

There are approximately 3.6 million beef cattle in New Zealand and 6.5 million dairy cattle. The 150,000-odd cattle to be killed makes about 1 per cent of the total cows in New Zealand. The culling will be spread over a couple of years. In any normal year, about one million cows are culled as farmers replace them.

The culling is expected to involve around 200 of the 20,000 dairy and beef farms in New Zealand. For those 200 farms clearly the impact of the disease will be huge.

What will happen to the farm workers? In some cases their employment might come to an end through the operation of a legal doctrine called frustration of contact. When a catastrophic event occurs which neither party to the contract is responsible for, and it is no longer for possible for the contract to be performed, the contract will be frustrated and discharged.

The most obvious example of a frustrated contract is where an employee dies. Another example is where a hotel burns to the ground and there is simply no hotel for the hotel workers to work in.

Is cattle being culled to prevent disease spreading is comparable to a hotel burning down? It is likely that the workers' contracts would not truly be frustrated.

Accordingly a restructure of the business would need to be carried out where the impact of these changes affects the needs of the business. Some farms might actually have increased workloads as new cattle are purchased and need to be incorporated into the farm structure. Where this is the case farmers will certainly want to keep their workers.

The disease could have a significant flow-on effect on immigration. Many farm workers are migrants. If they lose their work because of the disease it may mean they will be forced to return home. Migrant workers may be relying on their work to cover their travel home and other expenses incurred in coming to New Zealand. There are likely to be some cases of real hardship.

The farmers themselves will also be affected. Farmers work hard for long hours and are at the mercy of the land, the weather and as we now see, the risk of disease in their herds. Depression and other mental illnesses are recognised problems amongst farmers and increased pressure caused by the disease may exacerbate it. Farming organisations will be particularly important in providing support.

Readers will be aware the Government has budgeted the cost of eradicating the disease and compensating the farmers to be about $1.2 billion. The government will meet two-thirds of the cost, with DairyNZ and Beef+Lamb NZ picking up the other third through additional levies on farmers throughout the country.

There have been complaints about the time taken to process compensation claims. The Ministry of Primary Industries has said that substantial claims for compensation should now be processed within four to 10 days.

It is not novel for cattle to contract diseases. There is always some risk. The question is when should an issue be left for individuals or groups to deal with and what should be addressed by the Government.

There was an interesting case involving the Ministry of Health that contemplated this question. Seven parents of disabled children and two disabled adults took a case to challenge the Ministry of Health's blanket ban on employing parents to provide disability support to their children.

Many family carers of disabled people were suffering real hardship. Solo parents caring for adult disabled children, were entitled to a Domestic Purposes Benefit of then $336.55 per week plus an accommodation supplement. However if the carer had a partner who worked full-time they frequently did not qualify.

The legal claim was that the ban on employing parents to care for a disabled child was discriminatory and therefore unlawful. The Court of Appeal held that because the parents lost the opportunity to be employed for providing care services they otherwise could be employed for, and the disabled person lost access to the full range of carers, they both suffered disadvantage.

The Court declared the Ministry's policy illegal.

The political response to this problem was that Parliament passed, under urgency, an amendment to the relevant Act allowing some family carers to be paid the minimum wage for some hours they worked. This was a compromise solution.

In the cases of the cattle disease and the case involving the Ministry of Health, people had to manage what life dealt them, but in the circumstances it was right that the government stepped in. Overall we are a compassionate society and endeavour to balance individual responsibility with community support.

Hopefully the impact of the cattle disease has been largely ameliorated by the steps the Government has taken and affected farmers will ensure they get the support they need.