AUSSIE ANIMAL ID IMPACT STUDY
     
MEMBERSHIP FORM and PETITION

USDA HANDBOOK addresses Farmers as Uneducated

What is DEPOPULATION?

Points For Opposing Animal ID

Export Myths and Fairytales

NASS Survey Information

ARAPA Statement to the Senate Ag Committee

Codex Alimentarius

FORCED NAIS

Sound Science Killing Us

What Can I Do?

2006 ARKANSAS COOPERATIVE AGREEMENT WITH USDA

What are the vets saying?

BREAKING NEWS

Congressmen Speak Out

International Entanglements

What is COOL?

Mad Cow Madness

CONTACT US

By-Laws

2007 ARKANSAS COOPERATIVE AGREEMENT WITH USDA

Important Links

ARKANSAS ANIMAL PRODUCERS ASSOCIATION

Photos From Conway Meeting

FREEDOM TO FARM ACT UPDATES

ALERTS

Corporate Hostile Takeover

What About The Amish?

CONSTITUTION RULES

How do Packers fit in?

The Real Reason for Animal ID

AUSSIE ANIMAL ID IMPACT STUDY

Endangered Property Rights

Organic & Grassfed Growers Also Affected

DATABASES - How Safe Are They?

Wake Up, Farmers!

USDA/APHIS NAIS DOCUMENTS

CAPTIVE ANIMAL FACTORY FARMING

Technology Behind NAIS

AUSSIE RANCHER SPEAKS OUT

NIAA Conference Reports

Pushing Us Off Our Farms

Ag Lawyer Responds to the NAIS

NAIS SUMMARY

INDUSTRIALIZED FARMING

Uncle Sam Wants YOUR Animals!

HORSE TIMELINE FOR NAIS INCLUSION

NAIS DRAFT STRATEGIC PLAN

What is REAL ID?

"CREATIVE" SIGN-UPS BY THE GOVERNMENT

Animal ID Problems in Other Countries

Farm Bureau Connection

NAIS Threatens Rare Breeds

RFID Tags - Good, Bad & Ugly

R-CALF USA Fights NAIS

Retired Army Colonel Rebuts NAIS

Equine Species Working Group Contacts

BRUCE KNIGHT'S SPEECH

INFO ON USDA'S NEW "USER'S GUIDE"

SCRAPIE ID for Goats/Sheep & the NAIS

NAIS ID Terminology

GETTING OUT OF THE NAIS

The PLUM ISLAND CONNECTION

The Plan is AGENDA 21

4-H, FFA Targeted at Fairs

MICROCHIPS Cause CANCER

Leon's Story - Chipped Dog Died From Cancer

TRACKING ROGUE CHICKENS

Protection From Terrorist Livestock

NAIS NEWS in OTHER STATES

Truth about FOOD CONTAMINATION

TRUTH about Foot & Mouth Vaccines

MICROCHIP PROBLEMS IN DUTCH HORSES

What is DELPHI TECHNIQUE

NEW INFORMATION ON EQUINES

2005 ARKANSAS COOPERATIVE AGREEMENT WITH USDA/APHIS

CONTACT GENERAL ASSEMBLY MEMBERS FOR ARKANSAS

Bird Flu Fowl Play

USDA, INCORPORATED

ECONOMIC IMPACT ON HORSE OWNERS

 

SUBMISSION TO THE QUEENSLAND GOVERNMENT


ANIMAL ID IS NOT WORKING IN AUSTRALIA!

Submission to the Queensland Government

Relating to the National Livestock Identification System

Regulatory Impact Study

Presented by the Australian Beef Association

P O Box 812

Toowoomba 4350

Index:

The Australian Beef Association      3

Executive Summary of the Submission     4

Introduction         6
Legality          7
Success of the Existing System      8
Industry Ability to Pay        9
Complexities of Market Access      9
Over Simplification of the Disease Model     10
Inability of the NLIS to Deliver Required Outcomes   10
Technology Inadequacy       11
Central Database Integrity and Access    11
Feedback from Processors      11
Genetic Selection Benefits      12
Stock Theft         12
Guarantee of Gains to Producers     13
One Size Fits all Approach      13
Legislative Intent        14

Consistency with other Legislation     14

Discounting of Cattle Which Lose Lifetime Traceability 15

Extra Handling and Increased Stress    15
Potential Risk of Injury       17
Alternatives        18

Costs          20

Benefits         22


The Australian Beef Association

The Australian Beef Association is a national, representative body focused on improving profitability for the beef industry by giving control and ownership of industry projects and policy back to members. The Association is a non-profit organisation founded by concerned industry people in 1997. It is the first nationally elected meat body in Australian history.

The Australian Beef Association is a democratic industry body which is run by a board of 15 directors, each of whom represents a district in Australia. One director has also been selected to represent stock agents. Boundaries for the districts were established based on cattle numbers.

As at January, 2005, the Association had a financial membership of 800 including beef producers, livestock carriers, stock agents and processors. Members include some of the larger producers in Australia and also some small producers. In total, producers hold over 2,000,000 head of cattle.


Executive Summary of Submission

THE ABA IS IN TOTAL DISAGREEMENT WITH THE REGULATORY IMPACT STUDY AND IS TOTALLY OPPOSED TO THE INTRODUCTION OF THE MANDATORY NATIONAL LIVESTOCK IDENTIFICATION SYSTEM IN ITS CURRENT CONFIGURATION.

THE STATED OBJECTIVE OF PROVIDING TRACEABILITY TO THE CONSUMER FAILS COMPLETELY. THERE IS NO LEGISLATION COVERING THE CONTINUATION OF THE INFORMATION CHAIN FROM THE ABATTOIR SLAUGHTER FLOOR TO THE CONSUMER. There is no proposal to make the legislation complete.

THE ASSOCIATION QUESTIONS THE LEGALITY OF THE PROPOSED NLIS AS IT APPEARS TO BE INCONSISTENT WITH THE STATUTORY INSTRUMENTS ACT 1992, and may require clearance from the NCP before it may be introduced.

The existing system of identification in Australia is arguably the best system in the world, and is superior to the proposed NLIS for a number of reasons. THE EXPERIENCE IN OTHER BEEF PRODUCING AND EXPORTING NATIONS IS THAT SYSTEM SIMILAR TO THE PROPOSED NLIS ARE NOT WORKABLE.

The assumption that beef producers can afford the cost of introducing and running the proposed system is incorrect. Producers, with their current negative rate of return, cannot afford to introduce a system which has yet to be proven as workable. The ABA also contends that the Queensland Government cannot afford to risk public money on an unproven system.

The proposed NLIS grossly oversimplifies market access.

The disease model put forward in the proposed system is undeliverable and draws unsustainable conclusions relating to market reaction to BSE and FMD. INTRODUCTION OF THE SYSTEM WILL NOT CHANGE MARKET REACTION TO THE DISCOVERY OF THESE DISEASES.

The NLIS remains incomplete and unaudited in Victoria. The ABA maintains that promising the market a system which cannot be delivered in full and on time will have a devastating effect on export markets.

There is substantial evidence which shows that 75% of rural and regional Queensland is technologically inadequate. Put simply, many beef producers do not have access to the technology required to make the proposed NLIS operate.

The proposed scheme does not guarantee the integrity of the central database, and THE ABA HAS ALREADY RECEIVED REPORTS OF GROSS ERRORS IN DATA HELD WITHIN THE SYSTEM.

Early promises of feedback from processors to producers have been withdrawn in Victoria. This failure removes the supposed benefits of feedback, management and genetic improvement under the scheme as it stands.

Incidents of stock theft under the proposed scheme have the potential to increase rather than decrease.

Introduction of the scheme in its present form does not guarantee any gain to producers.

The proposed scheme is unacceptably rigid and does not consider the huge variations between beef producers. The system presumes that all producers conform to a theoretical average; this is totally impractical.

Key elements of a national approach to livestock identification and tracing as summarised by the Primary Industries Ministerial Council of 2003 have not been adhered to.

The NLIS as proposed for Queensland is not consistent with legislation in other states and territories

The discounting of cattle which loose lifetime traceability because of system failures is unjust and can not be carried by producers particularly as there is no regulation being introduced to ensure that processors do not put beef from the discounted cattle in the same boxes as comparable, higher-priced beef.

The extra handling and stress which will occur with the introduction of the proposed scheme will be detrimental to cattle and will reduce their market value.

The proposed scheme increases the danger of injury and/or death to many involved in the beef industry.

The RIS does not consider any alternative to the proposed NLIS, including the existing system which is efficient, effective, and meets market requirements.

The suggested implementation cost of $7.50 per head sold is at odds with the ABA estimate of $37.00.

The benefits suggested by the NLIS in its present form cannot be delivered.


Introduction
The Australian Beef Association is in total disagreement with the Regulatory Impact Statement, and is totally opposed to the introduction of the mandatory National Livestock Identification System in its current configuration. The proposed system is unworkable and was developed without adequate consultation with beef producers, who are the major stakeholders in the industry. The NLIS as it stands has not been shown to deliver any benefit that will outweigh the cost of its implementation and operation. The proposed system is fatally flawed in that does not allow traceability back from the end consumer to slaughter, then back to birth. Failings of the Regulatory Impact Study are detailed in this submission.


Legality

The Regulatory Impact Study appears to be inconsistent with the Statutory Instruments Act 1992 as it fails to:

Provide information on the nature and extent of cattle movements in this state. The ABA believes that no research has been done to establish the level of inter-property or non-revenue raising movements of cattle, therefore the costings are at best a guess.
Provide a statement of the alternatives to the regulation. The alternative technologies available are not addressed and the current high level of effective traceability is not taken into account. The differences in the National scheme vary from state to state; implementation plans are not analyzed as to cost and benefit.
Calculate the effect that costs imposed by the system will have on the beef industry’s market share when compared with chicken and pork. Chicken and pork producers will not be subject to similar identification systems and so will have an unfair market advantage.
Calculate the effect that costs imposed by the system will have on the beef industry’s export market share when compared with Brazil, the USA, and Canada, who are not imposing these huge costs on producers.
If introduced, the NLIS will constitute government intervention in the beef industry by way of regulation, and will weaken the established and historical property rights of cattle owners. The Australian Beef Association contends that this may theoretically move the economy away from optimal resource allocation, and may constitute a “public bad”, or market inefficiency. Should this be the case, clearance from National Competition Policy may be required before the NLIS can be implemented. This would be achieved by application to the Australian Competition and Consumer Commission.


Success of the Existing System

As stated in the RIS, Australian beef producers, including those in Queensland, have long been world leaders in traceability and effective livestock identification. The current tail tag system has had individual numbers on tags since 1992.  This RIS fails to calculate the proposed increase in traceability, as all suggested benefits are calculated from a zero starting point rather than from the current level of effective traceability and livestock identification.

Currently Australia is the only country with a mandatory identification system which gives practical trace back.

The NLIS being proposed in Australia is significantly more expensive and restrictive than less complex systems being implemented by our major competitors, especially when viewed in conjunction with the comparatively low level of Australian Government Assistance, and comparatively high current costs of regulation in Australia. (Research undertaken for Meat and Livestock Australia by S.G. Heilbron Economic and Policy Consulting in 2000.)

Australian Beef Association research indicates that:

Canada does not intend to record cattle movement on an electronic database;
Brazil is using firebrands, tattoos, and owner’s choice of tag technology;
The U.S.A. is talking of a voluntary scheme encompassing a range of choices as in Brazil, however U.S. processors are opposed to Country of Origin, (COOL), labeling on the grounds of unsustainably high cost.
The NLIS does not take into account the adverse market reaction of promising a system and being unable to deliver that system in full and on time. The detrimental effect of this non-delivery can be seen in the recent correspondence between the E.U. and Brazil in relation to Brazil’s noncompliance with SISBOV.

The NLIS as currently configured does not acknowledge the real world costs of such a scheme as demonstrated in the U.K., and by costings in Canada and the U.K., as well as costings by Australian producers. These costings multiply the Synergies costing by a factor of between five and ten, and destroy its credibility.


Industry Ability to Pay

The assumption that producers can afford the cost of introducing and operating the proposed NLIS due to record beef and property prices highlights the unjustifiable and unreasonable desire of tagging companies and Government to financially drain an industry which is at last beginning to show a small level of gain. The level of profitability in Queensland’s Beef Industry needs to be stated. Specialist beef properties in Queensland showed a negative rate of return of -1.9% in 2002 and -0.1% in 2003. (Australian Bureau of Agricultural Resource Economics, Jun 04). The increase in property prices serves only to increase the cost of production and decrease the rate of return on assets managed.

The Queensland Beef industry cannot afford to throw money at a scheme which has not been proven anywhere in the world to deliver the level of traceability which is suggested by the performance standards.

The Queensland Government itself cannot afford to throw money at the scheme, as the U.K. Government has been forced to do with its ill-fated system. The fact that the U.K. system needed heavy government subsidisation has not been acknowledged or addressed in the R.I.S. for Queensland.

Complexities of Market Access
Market access is a complex political, entrepreneurial and societal blend. This report attempts to simplify the status of current market access as little more than just the use of ear tags. This is a ridiculous over-simplification of market access. Recent demands made on the United States beef trade by Japan, and the complexity of those demands, highlight the reality that a single system will never guarantee market access.

The announcement of the resumption of trade between the US and Japan on Thursday 10th February 2005 diminishes the urgency, the value and the necessity of the NLIS system in Australia, especially in light of the development of the Pacific Rim of BSE tolerance proposed between Canada, U.S.A, and Japan.

The proposed system of identification does not extend beyond the point of hide removal at the abattoir. This was substantiated by John Keir on 24th January 2005. As yet there is no practical method of forward traceability, which is the only level of traceability which would add a premium to individual cuts of meat.

Oversimplification of the Disease Model
The disease model presented in this report is oversimplified. When there is any sign of disease in a national herd the reaction of any beef-importing nation is to immediately ban any imports from the infected source. No system of identification, including the proposed NLIS, will cushion producers from this market reaction to the discovery of Foot and Mouth Disease or BSE, (see the Canadian experience). The use of ear tags as proposed under NLIS is not a guarantee of disease discovery because of the random nature of carcass testing. There is no way of assuring the integrity for non-conformance of individual carcasses or cuts of beef.

Inability of the NLIS to Deliver Required Outcomes
In its present configuration the NLIS as introduced in Victoria has not been able to deliver the required 48 hour traceability with 95% accuracy. In other words, the system which is to be forced onto an unwilling Queensland beef industry has been only partially implemented in Victoria and the data integrity has yet to be audited.

The ongoing impact of the non-compliant 5% which is allowed by the system is not calculated in the proposed system. Like compound interest, this non-compliant 5% of cattle which remain in the national herd will grow.

The Australian Beef Association maintains that figures based on the assumption that 48 hour traceability with 95% accuracy can be achieved are nothing more than unrealistically optimistic speculation. The fact that a large proportion of Qld’s beef producing areas do not have a 48 hr service obligation on data in telecommunications demonstrates that the performance standard is currently undeliverable. As well as the low level of telecommunication services available, producers are also hindered by uncertain power supplies. When the power fails so do the producer’s offices and facilities. There is also the failure to acknowledge that many producers still do not have access to mains power, and must depend on generators, which do not provide the reliable power supply required by modern technology.

U.K. experience was reported by a Parliamentary Committee Inquiry in 2004. They had 700 bureaucrats chasing a herd of 10 million cattle, costing Government and industry $69 per head sold, and still had 20% of the cattle on the database listed as “missing”.

The MLA has stated that it will not accept any form of hand written NLIS documentation. Beef producers who are cut off because of telecommunication failures or power failures are not permitted to fall back on overnight post or fax facilities available at Post Offices, many of which are over several hours’ drive from the producer’s property.

Technology Inadequacy
The Queensland Government’s Beef Industry Taskforce recently determined that 75% of rural and regional Queensland was “Technologically Inadequate”. This shortfall in technological adequacy extended beyond access to advanced telecommunication, and found some regional citizens had no telephone lines, no access to fax facilities, no access to e-mail services, and no current ability to operate computers. These people included beef producers who will be forced to comply with provisions of the proposed scheme. Inadequate access to the technology required by the system will make it impossible for some producers to comply. On December 15, 2004, Premier Beattie stated in part that, “ Telstra is a long way from having the service level right in Queensland ….. no one can claim we have a system that is up to the mark ….. (it’s) tough luck if you live outside a metropolitan area”.

The ABA insists that legislation which makes impossible demands on law-abiding citizens is inconsistent with natural justice and immoral in its execution.

Central Data Base Integrity and Access
The proposed NLIS does not guarantee the integrity of the central database. ABA has already received complaints from members who have found gross errors in data held within the system.

The proposed system gives no guarantee that producers will have access to their own information held in the central database. It has been suggested that producers may have to pay for the privilege of accessing this information. The central database will be of little or no use to producers if their own information has been entered inaccurately, or is not freely and readily available. It is vital that producers have privacy, and that their own information is not available to other producers, processors, agents, government departments etc. Producers at the 16 “Listening Sessions” conducted by the United States Department of Agriculture consistently pushed for a decentralised system that is to be “firewalled” to guarantee the above. The proposed system in the U.S.A. is to remain voluntary due to the producers’ concerns about privacy.

Feedback from Processors
Early guarantees of feedback from processors to producers have been withdrawn in Victoria. This failure to provide feedback removes any of the supposed “herd improvement” or “better management” claims made by proponents of the scheme.

Genetic Selection Benefits
The suggested improvement in farm management and genetic selection illustrate the author’s lack of knowledge of beef production. Genetic selection can occur only if herds are pedigree recorded. In other words, producers must know details of every sire, and every dam, and all results of successful mating of all sires and all dams. The recording of matings, births, deaths and cullings, the fencing, time and labour required to achieve this outcome over the Queensland herd would be incalculable, and would run to billions of dollars.

The cost of maintaining the extensive records required for stud breeding is so great that breed societies are in decline and there is a steady fall in the number of recorded cattle. The lifespan of the average pedigree herd is seven years. It is impossible for many producers to recoup costs and make a clear profit over such a short lifespan.

There is no costing of the scales, readers, software, time and labour that are required to deliver any of these suggested benefits. From a management perspective an 80c visual tag is often of more benefit, particularly with genetic selection, than a $3.80 tag that can be read only in a race with an electronic reader. It is impossible to match a mother with its calf while the animals are in a race.


Stock Theft

Ear tags deliver no stock theft benefit as they are easily removed.


Rumen bolus devices cost more than an ear tags and also cost more to implant. This cost was never considered in the RIS. Nor at any stage has the RIS acknowledged that the rumen bolus has been flatly rejected by processors for more than five years. Processors maintain that boluses are too slow and difficult to retrieve after slaughter, and can dull and damage knives and other equipment during slaughter. The use of rumen boluses is also unworkable because of the risk of contamination of meat when the gut is opened to retrieve the device at slaughter. Rumen boluses may also be rendered unreadable by the implantation of a second device or piece of metal to the rumen.

Hide branding is being retained in the United States and South American countries. It is simple and effective.

The discontinuation of branding in favour of tags or rumen boluses will make theft easier not more difficult.

Guarantee of Gains to Producers
There will be no gains to producers.

The market for beef has always been very price sensitive. Market reaction to any increase in the cost of beef has, historically, been to seek alternatives rather than accept the price increase and maintain consumption levels. This fact is currently being demonstrated in the US where multinational processors are fighting the Country of Origin Legislation on the grounds of cost. They want to be able to use cheap, imported beef with no label of origin to the consumer. The ABA believes that the cost of implementing and operating the proposed NLIS cannot be passed on to the consumer, because no information is being passed on to the consumer. It will be carried by the producer. There is no evidence that the suggested benefits of NLIS will be able to match or exceed these costs.

One Size Fits All Approach

The proposed NLIS requires all producers to operate under the same rigid system. Producers running as few as 10 head on a small property close to a major population center will use the same identification system as producers running as many as 20,000 head on vast properties in the outback. The system appears to have been designed to fit a theoretical “average” beef producer. In such a diverse industry any form of identification system must be sufficiently flexible to accommodate the vast majority of producers, the diverse terrain, and differing managerial options. In Brazil and the U.S. authorities are looking at a far more flexible, technology-neutral system which will allow producers who decide to introduce animal identification to choose software and hardware which suits their operations.

Australian producers operate in different commercial environments ranging from the low-cost/high-output, lower quality turnoff, (for which there is a great global demand eg. hamburger patties); to tightly controlled, higher cost operations with a more constant, higher-quality output. The ABA knows that each segment of the industry can be value added in different ways. However the contention that the application of one scheme, uniformly across all production segments will deliver equal benefits to each segment is plainly unsustainable. Huge variations in Australian climatic and environmental conditions alone produce huge variations in product.

Legislative Intent

The key elements of a national approach to livestock identification and tracing as summarized by Primary Industries Ministerial Council, 2003, have not been adhered to in that:

It is not a truly national system with the NT simply moving to mandatory waybills and cross branding, (a system that was already working well in Queensland). The proposed system does not consider the reality of cattle being moved from the Northern Territory into Queensland and other states when the Northern Territory refuses to implement the proposed system. Western Australia will adopt a risk-based system. In reality, there is no NATIONAL system of electronic identification.
A risk-based approach to the system has been completely ignored in Queensland due to commercial pressure from processors, sale yards, and feedlots to the detriment of producers. Research by the ABA indicates that the US, one of our major competitors and currently our biggest threat to premium market share, will probably adopt a risk-based system, if it adopts a system at all. (Professor Gary Smith, Colorado State University, MLA guest speaker at the Emerald Producer Forum, November 2004).
The scope of the proposed system to be enhanced by the introduction of more advanced technology has been severely limited by the ten-year technology compatibility clause. Ten years is a long time in the world of technology and Australia’s beef producers will be left with a system which will rapidly become obsolete, ineffective and economically unviable in a few years. U.S. producers have advised the ABA that the Alflex Technology is already outdated.
Consistency with other Legislation
Queensland, with 77% of its beef cattle herd distributed in extensive areas, has showed no similar thinking with the policy makers of the Northern Territory where the cumbersome nature of individual identification in extensive zones has been realised and accounted for. The rest of the world has either failed in attempts to implement RFID, or is simply not trying. Canada announced they will not do it; while in the U.K., the experience has proven itself fallible with 20% of cattle “missing”, (two million of 10 million head), inspite of 700 bureaucrats managing the system. Queensland has also taken the decision to introduce inter-property transfers in line with Victoria and before the rest of Australia. We are treading into unknown territory, promising our international and domestic markets that we can deliver a system that has yet to be trialed fully, let alone delivered.


Discounting of Cattle which Lose Lifetime Traceability

An unreasonable and unjust cost will be forced upon producers with the discounting of animals which lose lifetime traceability. If beef producers are forced to offer lifetime traceability under the proposed system, markets will insist that noncompliant cattle be sold at a substantial discount. This has been confirmed by Mr Geoff Teys, Chairman of AMIC, in numerous media releases. Should this discounting not occur, the suggested market access benefits of the proposed system will prove to be a fallacy. Assuming the unrealistic 95% compliance rate between tag retention and transfer of information could be achieved, the 5 % of cattle which lose lifetime traceability through system failure will be substantially discounted. This discount will move non-compliant cattle from their true level in the market down to non-premium markets, as stated in the RIS.

On the other hand, processors who buy these heavily discounted cattle, would be able to include this beef in the same boxes as beef from tagged cattle, and so sell it into the market at a premium price. There is no restriction on processors’ use of meat as the NLIS stops at the boning room and there is no trace-forward from this point. This major failing of the proposed system was made clear by Mr. John Keir of AMH in an ABC radio interview on January 24, 2005.

ABA believes that in Queensland alone in the first year, there would be in excess of 50% of cattle with “orange tags” due to many being shifted from the property of birth for management reasons. This would lead to a discounting process, which then gives processors huge potential to make profit in the marketplace at the expense of the beef producers.

The whole reason for the introduction of NLIS is negated by this one major failing. Currently a producer may offer for sale an $800-$1,200 animal which has full lifetime traceback with the existing system of waybills, tailtags, branding and earmarks. That animal will be devalued by the introduction of NLIS in its present form.

Extra Handling and Increased Stress

Various researchers have documented the extent of live-weight losses in cattle when they are removed from their grazing environment for different time intervals, and deprived of feed or water or both. Some of the best research done under Qld. conditions was done in the mid 80’s by Jennifer Wythes from the DPI Beef Cattle Husbandry Branch. This was published in DPI Farm Note F/65/Jul ’85.

Jennifer Wythes’ observations included the following;

Gut fill can account for 10-20% of an animal’s live-weight.
The longer stock are without feed or water or both, the more weight loss occurs.
The most rapid loss occurs in the first twelve hours after mustering.
Thereafter the rate of loss gradually decreases.
 

The Calm Services Manual for Calm Assessors has the following Table:

A Guide to Weight Loss after removal from feed and water.

Time off feed & water Liveweight Loss %

1 Hour 1.5%

2 Hours 2.5%

4 Hours 4%

12 Hours 7%

16 Hours 8%

A recent practical trial by an ABA member using the Roma saleyards, (the largest selling centre in Australia), produced the following result.

Angus X 20 month steers were sold on Tues 12th Oct, maximum temp was 31.8C at 4PM, and 32.3C at 4PM Wed.

The steers were yarded from “hayed off” oats at 4PM on Monday, and trucked 140km to Roma, arriving at 8pm. Their weight over a Roma public weighbridge was 448.6kg, just prior to delivery to Roma Saleyards where they had a “wet” curfew.

8pm Mon Entry Wgt 448.6 kg Interval Wt Loss % Loss
10.30am Tues Sale Wgt 405 kg 14.5hrs. 43.6Kg 9.7
10.30am Wed Wgt 398 kg 38 hrs 7.0 Kg 1.8
4.30pm Wed Wgt 391 kg 44 hrs 7.0 Kg 1.8 


The stock lost a further 14kg over the thirty hours after the normal sale weighing procedure, i.e. a loss rate of approximately .5kg/hr. These steers made approximately $2.00/kg, this loss rate equates to $1.00/hr/head. A twelve hour delay to current weighing times would cost $12.00/hd.

At this Roma sale some 9,000 head were sold by 4.30 pm Tuesday. Weighing was completed by 9.00pm. Bigger yardings often occur and temperatures can approach 40C.

The record of EU sales at Roma shows additional time in the yards for the cattle, additional stress on both employees and cattle. Mandatory NLIS will greatly increase this. Particularly as whole of life recording will require stock to be read twice in the saleyard.

If NLIS requires that stock are to be scanned into and out of saleyards, it is inevitable that stock will be held in the yards for longer periods. Losses could easily reach $20/Hd.

Stressed cattle ex saleyards often have much higher mortalities and veterinary costs in feedlots. NLIS-caused delays could easily cause increased stress, increased dehydration and reduce feedlot performance. NLIS-caused delays will also reduce meat quality and prevent many stock making MSA grading standards. ABA is of the opinion that the number of “dark cutters” would increase dramatically.
NSW Meat Industry Authority figures compiled on saleyard shrinkage, when water was introduced to the yards in the 1980s, strengthen the above figures. Twenty three consignments of cattle totaling 1,206 head, weighed on farm and then sold at Wagga, Camden or Homebush averaged 5.24 % shrinkage. The shrinkage depended on the time off feed. A late sale at Wagga with another 6 hours before weighing produced another 3 % shrinkage.

The proposed system will greatly increase the cost of handling of cattle from tagging through to slaughter, (and possibly after slaughter if rumen boluses were used).

Cattle must be confined/restrained whenever reading of recording devices is required. This extra confinement will increase stress to the detriment of the animal, and to the detriment of the meat subsequently produced.

There is great variation in the time between mustering and disposal of cattle across Australia. There is great variation in the time required in yards for inter-property movement scanning. Even if we give a conservative 2 hours additional lock up time, and give 2.5% shrink on $700 animals, we are looking at $17.50 per head.

Any suggestion that shrinkage and bruising don’t occur and shouldn’t be costed illustrates no understanding of the industry.

Potential Risk of Injury

Increased handling of cattle at all stages, where reading of identification devices is required, must increase the risk of injury to producers and their employees, agents, and abattoir employees and the cattle themselves.


In the ten years to 2000, Work Cover NSW statistics show 1 death, 125 permanent injuries, and 1,136 temporary disablements attributed to cattle. Total Work Cover payouts were nearly $13 million. This did not include casualties of self-employed producers who make up the vast majority of the industry.

Most small operations do not have robust restraining facilities, if any at all. Tail tagging can be performed over a race, in a truck or small pen.  Ear tagging animals is quite different. It is a very dangerous operation if the facilities are inadequate. This has already been recognised in Victoria where there is a permit arrangement for producers who can’t safely tag “ wild cattle”. They can be sent to a saleyard or abattoir without tags.

Alternatives

The RIS in no way considered any alternative, including the current system which is widely accepted by our customers.

There are many and varied alternatives to the QNIC RFID implementation plan. There are many technological solutions in the market place, none of which has been considered in this report in the context of cost and benefit. The voluntary RFID which has been used in Australia for the E.U. scheme for six years, has shown no real improvement in technology in that time; and there has been a continued “fallout” of producers who could not make it work.  Tying producers to this technology for a minimum of another ten years is market suicide. The pace of technological change is accelerating at speed. As a consequence, electrical identification equipment is becoming obsolete within a few years of its introduction. Australian beef producers cannot tie themselves to an identification system which will be out of date before it is introduced. If we look to the systems implemented by our major competitors in the global market place we can see the many and varied alternatives are available. Our biggest competitors into premium markets, which are the markets NLIS seeks to secure, are currently the US and Canada. Canada has implemented a system which, even though it is moving to Radio Frequency Identification technology, does not involve tracing animals on a database from point A to point B. The U.S. has only just begun to talk about implementing a Property Identification code, and is years away from developing a system of electronic individual identification. It is possible that the U.S. may never develop a system of individual identification. It is possible that within the next five years the whole idea of cattle identification as proposed in the NLIS will be something we look back on as the same “fatalistic over-reaction” we experienced with the Y2K bug.

Brazil looms as a serious, major potential competitor in premium markets. This would require one of two things to happen.

a. A shift in the attitude of the premium markets in relation to the disease status of these supplier nations, and beef sourced from them. If they lower their standards, identification in Australia would become irrelevant. We currently have a higher disease-free status than they have.

b. FMD to be eradicated from these nations; and their ability to substantiate their on-going disease free and food safety status.

Brazil has launched a system of livestock identification which has enabled them to continue to supply the EU. This system is called SISBOV. Brazil has remained the dominant supplier to the EU market. They continue to maintain access to this EU market with an identification system which gives a lower standard of traceability than Australia’s current system of tailtags, branding, earmarking, waybills and NVDs. Brazil has less than 5% of their stock fitted with RFID devices, as their government recognizes firebrands, tattoos and conventional tags.

By mandating NLIS for supply of beef to this highest premium market, the EU, our industry has seen the number of EU registered producers dwindle from 5000 to 2000, with more to be deregistered after the latest round of audits. We have been unable to fill this miniscule 7000 tonne quota over the last 3 years. A culture of dishonesty has already been created within the EU scheme with the movement of untagged stock between properties. This will multiply rapidly as the system becomes mandatory.

It is a known result that if compliance with legislation is too physically or economically challenging it breeds a level of dishonesty.

The other end of the scale is the level of traceability in the Japanese market. Japan has introduced Japanese Agricultural Standards, (JAS), certification in which beef may be traced from the supermarket shelf back to the individual animal. The differences in the beef are however massive. We are talking about beef that sells for $8000 a carcass as opposed to Australian beef selling for less than $1000 a carcass. This system does, however, serve to demonstrate that traceability can be adopted and developed in a commercial sense if processors are willing to provide individual cuts traceability and market product as such. Using this level of traceability may assist in the development of a new level of premium market. Australian beef producers maintain that insufficient quantities of Australian beef are of a sufficiently high standard to justify the cost of such a system.

The processing industry claims to have received strong market signals that variations in the NLIS system proposed for Queensland (eg. Pathways) will not stand up to audit and will not be acceptable to trading partners. How can processors make this claim when they are not passing on any information to their customers? How will risk-based systems of the Northern Territory and Western Australia be viewed, remembering we are selling this as a national scheme?

This again highlights the grave risks associated with promising a system that will be audited externally, will be shown to under-perform, and will consequently threaten our market access. We, members of the ABA, do not wish to risk our trading opportunities and integrity on the variable technology skills of the other 150,000 producers in this country; nor on the imperfections of the NLIS central database.

Costs

ABA believes the cost per head of introducing the system in its current form could be as high as $40. This cost could not be recouped and is unjustifiable.

The suggested $7.50 per head sold conflicts starkly with other “whole of life” system costings. The UK’s actual costing, (by Parliamentary Committee in November), is $69 per head sold. The U.S.A.s estimates for implementation of COOL is up to $50 per head sold. Canadian estimates for the equivalent of the proposed Australian system are $40 per head sold, (they decided not to proceed). Australian producer estimates have ranged from $23 to $58, with ABA’s first estimate being $37.
Electronic Tags - current cost of All flex button tag (the most popular ear tag) - $3.85

Plus 50c for time value of money and handling etc     

    3,750,000 * $4.35  $16,312,500

Tag Replacement – MLA standards are 2% loss rate /annum and 1% non-read rate. Tagging labour cost is calculated at branding so over the 2.5 year life span of each animal that is 7.5%

                                                $ 1,223,437

Readers – Of 1800 producers surveyed at public meetings by the ABA 85% moved cattle other than to sale yards or meat works.

Moving cattle between producers own properties
Paddock sales, (producer to producer, or producer to feed lot)
Sporting eg. rodeos, campdrafting etc.
Showing at agricultural shows
Agistment or leasing of properties
There is no evidence that the level of these movements has been calculated by DPI&F

MLA’s funding allocation does not include will not accept paper based transfers. If 50% of producers have 100 head or less they will need to pay a service body to read cattle at $2.50/hd.

Cost for readers 85% of producers >100hd – reader 22,100 producers @ 388.03

                                                $8,575,463

85% of producers < 100 HD reading fees 22,100 producers @ $10/annum

                                                $221,000

Labour tag attachment

      Assuming an animal is mustered and restrained for another purpose to ensure adequate tag retention to carefully tag, sterilize tagging pliers, reload tagging pliers will take 30 seconds per animal. Assuming 3 men at 18 $/hr = 80c per head to tag.

                              3,750,000 * .80 $ 3,000,000

Labour replacement Tag

      Applied pre sale on grown animal 1 minute per head

                              281250 * 1.60  $ 450,000

Labour reading

      In our experience we have found it necessary to create a record of all cattle leaving the property due to mistakes in transfers either at meat works or later in the animal’s life. To read an animal with a wand reader (the model costed) in the average loading ramp of 4 panels requires each animal to be blocked up and read. Therefore time and labour are required to read cattle. An increase of 15 secs per animal in loading time.

                                                $1,500,000

Infrastructure in yards.

      Many yards do not currently contain a head bail. Many are not set up for the reading or tagging of cattle. These parts of the yards will also have increased wear and tear. 1 head bail per producer every 20 years alone amounts to $10,400,000

Auditing cost

      Stated in the implementation plan to be born by producers. To achieve a level of 95% compliance would require auditing of all producers at $150.  $7,800,000

Increased handling of cattle

To establish lifetime traceability in sale yards will require cattle to be read twice which will result in increased time handling cattle – weight loss.
Increased movement of cattle through confined spaces i.e. races to read will result in an increased level of stress and bruising.
Increased time in yards of cattle due to reading and tagging before movement will result in weight loss. In Northern areas where mobs can be yarded in excess of 2000 head a small increase in time per beast could lead to losses.
The value of Queensland’s lost beef cattle production if a beast receives 5 extra minutes of handling in its lifetime due to NLIS (a very understated figure) and a beast between lost opportunity gain and shrinkage losses 0 .5% of its body weight per hour would be $1,285,415

The greatest cost will be in discounting of animals which lose lifetime traceability. If beef producers are forced to offer lifetime traceability under the proposed system, markets will insist that noncompliant cattle be sold at a substantial discount. If this is not the case then market access benefits are a fallacy. Assuming the unrealistic 95% compliance rate between tag retention and transfer of information correctly, the 5 % of cattle that lose lifetime traceability through system failure will be substantially discounted. If this discount were to move them down into non-premium markets as stated in the RIS, a 50% discount could apply.

Gross value of production * 5% * 50% $ 77,125,000

Other costs as listed in RIS   $ 13,111,100

A total cost of $141,003,915

                                    $40.29 / hd

or 4.6% of the gross value of production.

An increase of over 4.5% in direct expenditure due to a perceived benefit is a massive cost of any industry to bear let alone one with such a narrow or even negative rate of return.

Benefits
1. Inaccurate Assessment of Market Access

The RIS assessment of the benefits of NLIS in maintaining market access is ephemeral with no basis in fact. The NLIS as proposed by the MLA is not being demanded by any major market.

The USA began to move to Country of Origin Labelling, but processors have claimed that its costs are too high and they are now fighting it with USDA support.

If they regard identification of the country of origin as too expensive, how could they possibly ask for individual carcase identification? Japan, Korea, Canada and USA are moving toward a lower health standard for trading between their BSE affected countries. This process has begun with commencement of trade between the US and Japan and the proposed opening of the Canadian border to USA in March, despite the discovery of two more BSE cases in Canada in January 2005. This destroys the market access argument in the same way as EU/South American trading.

World beef markets are very complex by nature. To simplify export values into tonnage and dollar terms, as in Table 10, without accounting for variation in cuts is extremely inaccurate. This would be similar to comparing values received for grain and straw, saying that both commodities came from the one plant.

Market Access is determined by politics, inter-country trade arrangements, currency value, and barriers to trade both monetary and physical. Market acceptance of a product, which is a business arrangement between two companies, is determined by customer satisfaction. There are many factors which contribute to customer satisfaction; quality, perception, price and food safety They are different and complex things, and to simplify the equation down to: “Tag = access, No tag = no access" is an insult to beef producers.

Product differentiation can be delivered by many means. Processors in Australia are major beneficiaries of this scheme, yet have been unable to translate a perceived market demand into a premium before mandating of the system. The ABA has no doubt that a level of demand exists for lifetime traceable product, but the level and price sensitivity of that demand at a consumer level has not been adequately established.

2. Disease – No basis in fact

In the RIS, SES quantified a BSE outbreak as a $30 million market loss. Canada has shown that individual identification has not helped maintain or reopen its markets, or stop the continuation of incidents of the disease. FMD cannot be used as an effective argument, because lifetime traceability has nothing to do with FMD spread. The field incubation period is 2-8 days, and with data currently taking in excess of seven days to reach the database, and no service obligation on data transfer lines in rural areas, 48 hour traceability will never be achieved. Other states recognize that FMD is not safeguarded against without sheep, pig and feral animal control. How many disease outbreaks has Queensland had in the last 120 years?
As stated in the RIS, due to the low level of risk of BSE in Australia, the benefit assumed because of NLIS would amount to markedly less than the cost of implementing the system.

Re-entry after disease is also a complex marketing issue. NLIS will not deliver any of the outcomes requested of the U.S. by Japan post BSE; namely proof of age and testing.

3. Productivity Gains

There can be no benefit counted for productivity, as the extra costs of equipment, time, and labour are not costed.

THE SUGGESTION THAT IMPROVED FARM MANAGEMENT, ALLEGEDLY WORTH $50 MILLION, WILL FLOW FROM INTRODUCTION OF THE NLIS, DOES NOT STAND UP TO ANALYSIS. The $50 million benefit for on-farm management efficiency is included in the RIS report on the benefit side, but not in the costings in the report. Other States and MLA have abandoned it.

It appears that the authors of the RIS are unaware that abattoirs have declined the recommendation to automatically provide carcase feedback. This is usually available under the current tailtag/individual number system, if one is prepared to pay for it. Listing of “ time saving," and of “ability to withstand harsh environments” illustrate no understanding of the practicalities of running a commercial herd.

Turning every commercial herd in Australia to pedigree-type management would render many commercial herds unviable.

There can be no benefit counted for productivity, as the extra costs of equipment, time, and labour are not costed.

http://www.austbeef.com.au/Postings/15403/Content/ABA%20Qld%20NLIS%20RIS.doc