HRA Industry Notice - EADRA

16 November 2010
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The Emergency Animal Disease Response Agreement (EADRA) is an agreement between Animal Health Australia, the Australian Government, all State and Territory Governments and approved livestock industries which details how an emergency animal disease will be managed, responded to and paid for.
It has been a long held position of HRA to be a signatory to the agreement in order to provide this important safeguard to protect our industry.
Despite over a decade of discussion, the horse industry is not a signatory to EADRA and as such remains vulnerable to an emergency disease outbreak as there is currently no agreed response plan. Because of this, the Australian Government have formally advised there would not be a national response in the event of an outbreak.
More recently, in April 2010 the Primary Industry Ministerial Council (PIMC) considered a proposal to voluntarily vaccinate horses for Equine Influenza (EI) due to the absence of a horse industry EADRA.  The harness industry rallied against approving EI vaccination given the scientific evidence, economic impact and trade restrictions of such a decision.
From this meeting PIMC resolved that the horse industry has until 1 December 2010 to find agreement among all equine groups to both sign EADRA and determine an agreed Levy Mechanism for the collection of funds to repay the Commonwealth should an emergency animal disease response be mounted.
Since then HRA has been participating and assisting in industry discussions and Levy Mechanism Working Parties co-ordinated by Animal Health Australia in order to achieve this important outcome by 1 December 2010.
The following information provides an insight into the discussions and how a levy would work. It is important to note that a levy is not invoked until after a disease event. Agreement to sign EADRA and the incorporated levy mechanism does however provide the assurance of a national response should a disease event arise.
Preferred levy collection options
Following the detailed consideration of various possible mechanisms for recovering the horse industry’s share of an emergency disease response, the two preferred options are for small levies based on manufactured feed and anthelmintics (worm treatments).
In support of these mechanisms, the following points are relevant:
  1. These two levy options are strongly supported by all sectors of the Australian horse-owning community, including national horse organisations and most of their subsidiary bodies. In the event of a disease emergency, the majority of horse owners are prepared to accept a small increase in the price of ‘hard feed’ and wormers.
     
  2. Under the terms of the Emergency Animal Disease Response Agreement (EADRA), the Commonwealth will underwrite the response costs, enabling quick and effective action to be taken immediately – making it possible for all racing and recreational activities to return to normal as soon as possible. This is in everyone’s interests, including stockfeed and wormer manufacturers.  (During the 2007 equine influenza (EI) outbreak, sales of manufactured horse feed dropped by about 30%.)
     
  3. Since the EI outbreak, there has been a significant increase in the level of awareness and implementation of biosecurity measures throughout all sectors of the horse industry, and also government agencies such as AQIS. The probability of an exotic disease incursion is now much lower.
     
  4. It is now far more likely that an exotic horse disease will be recognised and diagnosed much earlier, greatly reducing the costs of an eradication campaign. The costs of a response (for EI or any of the other 22 diseases than can affect horses, listed in the EADRA) are unlikely to be more than $30-50 million.
     
  5. After an emergency response is finished, the EADRA provides a payback period of 10 years. This means that the horse industry commitment would be approximately $3-4 million per year. Based on the sales figures for horse feed and wormers, the levies would represent only a small increase (about 3 cents/kg for feed and 50 cents/dose for wormers) in the price for owners.
     
  6. The levies will be zero-based, and only triggered if and when an emergency response is required. No money would be collected until an actual emergency occurred, and the levies would stop when the industry share was repaid.
     
  7.  When the costs of an emergency response are calculated, the amounts of the levies would be determined, and the small amounts added to the wholesale costs – to be passed along the marketing chain. The accounting procedures are very simple and should involve minimal cost; however the companies who collect the levies will be able to retain those funds for up to 12 months, and keep the interest earned, to offset any additional cost incurred.
     
  8. The proposed levy collection is based on two commodities that are widely used throughout the horse-owning community, providing reasonably good ‘coverage’; it is accepted that anything like 100% coverage of horses and owners will never be possible. The small additional cost of the levies is unlikely to affect the buying habits of people using hard feed and wormers.
     
  9. Both the proposed collection methods are consistent with the Commonwealth’s Levy Collection Guidelines and can be legally implemented. Because of the limited number of ‘collection points’, the costs of collection and auditing would be minimal. (These levies are comparable to the indirect levy placed on plastic pots used by the plant nursery industry, for disease control purposes.)
     
  10. The proposed levy legislation will include provision for a five-year review of collection arrangements. This means that as the marketing environment changes and/or there are new products available, the legislation can be amended accordingly.
There are currently moves to introduce a requirement for each property running horses to have a registered Property Identification Code (PIC). Within the foreseeable future, it is likely that mandatory microchipping of horses will be introduced. If this eventuates, the registration of horses and sale of microchips would be a logical basis for a zero-based EADRA levy, making any other collection method unnecessary.
The HRA Executive and Membership has unanimously endorsed manufactured feed and anthelmintics (worm treatments) as approved levy mechanisms for recovering the industry’s share of an emergency response.
HRA Chairman, Mr Geoff Want, and Chief Executive, Andrew Kelly, will appear before the Senate Standing Committee on Rural Affairs and Transport Inquiry into the Australian horse industry and an emergency animal disease response agreement this Friday, 19 November 2010 from 9.15am.
HRA’s submission to this inquiry is available by clicking here and further information is available via the Animal Health Australia website here.
For further information contact Andrew Kelly:  03 9227 3000.

 

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